Institute slams red tape

A newly-published report from the Adam Smith Institute has slammed PFI for excessive bureaucracy, costs and delays that are forcing contractors to pull out of schemes labelled as unworkable.

The institute warns that, unless the Government clarifies the PFI process, the initiative will be marked down as a massive Tory failure. The report, Winning Back the Initiative, points out that PFI contracts are set to fall 40% below the Government's œ40 million target.

Other criticisms include:

n the high cost of tendering;

n the public sector's failure to listen to contractors' suggestions;

n its tendency to alter specifications halfway through design, adding to costs and causing further delay;

n putting inappropriate schemes up for tender.

The report suggests a PFI panel member be appointed as guardian for each PFI scheme, that projects be prioritized.

It urges the public sector to specify its needs clearly and calls for tender lists to be kept down to two or three bidders.

A Treasury spokesman said: "We made these criticisms in our PFI guidelines published in April. There are signs that the message is getting through."