PracticePeople In PracticeDoors open to risk of corruption on PFI, claim Tories

Doors open to risk of corruption on PFI, claim Tories

The way the government is proceeding with the Private Finance Initiative risks financial impropriety or worse, the Conservative party has warned.

Conservative spokesman Howard Flight sounded the alarm after economic secretary Melanie Johnson rejected demands from the Commons Public Accounts Committee for PFI advisory body Partnerships UK to be subject to inspection by the National Audit Office, and turned down a Tory amendment preventing the Treasury financing the proposed company by means of guarantees.

Flight said: ‘The structure as laid down by the Bill opens the doors to the risks of corruption.’

He was commenting following a debate on the Government Resources and Accounts Bill after Johnson agreed to amend the legislation to lay down a statutory limit to the finance the Treasury provides Partnerships UK.

Flight said his party, the Confederation of British Industry and the Trades Union Council were concerned at the potential conflicts of interest when Partnerships UK, with access to public business, set up privatisation schemes and invested in them.

PAC chairman David Davis said: ‘It is hard to escape the conclusion that the Treasury must have designed the arrangements deliberately to exclude a role for the Comptroler & Auditor General and the PAC.’

He complained the new body would be up to 49% Government-owned, the Treasury would appoint directors and have s substantial holding. It would impact the use of public money and derive revenue from the public and private sectors.Johnson promised the NAO would continue to be able to audit particular PFI projects.

Thumbs up for PFI from Arthur Andersen report

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