Deloitte gains PFI contract from E&Y
Deloitte & Touche has been appointed financial adviser to Fife council at a time when the Big Four is facing a potential crisis of confidence over their involvement in private finance initiatives deals.
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Deloitte’s appointment followed Ernst & Young’s resignation as adviser, after Fife decided that its role as auditor to one of the private bidders in a major PFI contract represented a potential conflict of interest.
Public sector union Unison has also voiced strong opposition to the Big Four’s involvement in PFI. It has claimed that the Big Four advised the public sector on 45 PPP projects, where the client of the firm in question had also been involved in the bidding process.
Pearse Rutledge, partner at E&Y, said: ‘You’re mandated for a role like that and then the bidders come forward. Until the bidders come forward, you don’t really know which companies are going to be involved.’
The news came as a survey released by E&Y pointed to strong prospects for accountancy firms involved in the PFI market.
With banks less inclined to lend 25 to 30-year terms to finance projects on their own, the report pointed to a new robust secondary market in trading PFI investments.
‘We’re heavily involved in the secondary equities valuation and trading market and also in refinancing,’ said Rutledge.
Unison claimed PFI was a waste of money, citing increased borrowing costs over the long term.
Jane Robinson, spokeswoman for Unison, said: ‘Private sector borrowing costs more than public sector borrowing. It could cost the public sector a fifth of what some contracts are costing at the moment.’
But E&Y said increased efficiency was more than compensating for any perceived increase in borrowing costs.