Public Sector – NAO approves ‘novel’ funding

The National Audit Office has pledged it will not criticise private finance initiative projects and government schemes that use innovative funding mechanisms simply because they take an unusual approach.

Following publication of the ‘Modernising Government’ white paper, an NAO official told Accountancy Age: ‘We have said we are not going to criticise PFI just because an organisation has taken a new approach but we would look at how sensibly it has been managed. These lessons have been drawn by the public accounts committee in the past.’

The pledge comes as the PFI looks set for renewed criticism over its management. The threat this time comes from a Treasury taskforce which has launched a study to establish why so many large information technology projects run under the initiative have failed.

Several high-profile failures have included the national insurance recording system, a Home Office immigration computer system and a prison agency system.

Conducted by the taskforce, the Central Computer and Telecommunications Agency and the Cabinet Office, the study will examine the causes for the delays that have disrupted services and hit suppliers with heavy penalties.

The inquiry will run alongside similar investigations by MPs on the Commons Treasury select committee and the public accounts committee.

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