The PFI bank: A recipe for Whitehall meddling?

The Government seems bent on sneaking out the Bates review on the eve of Parliamentary recess. But that has not prevented the industry from learning one of the central recommendations of this major overhaul of PFI - to turn the Treasury's PFI task force into a bank owned largely by the private sector.

Largely, you notice, but not completely. In fact the Treasury, it is suggested, would retain a 49 per cent stake. This is eliciting predictable squeals of disapproval from the private sector, which warns that a bureaucratic quagmire will swallow the hard-won gains of the last six years.

Are these complaints justified? The trouble with taking these opinions at face value is that the private sector has routinely thrown up its hands in horror at suggestions of change. Take complaints in the spring that new accounting rules would bring PFI to a juddering halt. The rules have since been introduced with neither modification nor hiccup.

Will public sector involvement in the bank be as bad as it is made to sound? That depends. Involvement per se is not the problem, rather what type of involvement? Will Whitehall participate as silent shareholder, or leading member of the board? Is it content to play Robin Hood, capturing the benefits of PFI for the public coffers - or does it want to micro-manage PFI's delivery?

The Government already exerts influence over the direction of PFI. That is not only inescapable, it is positively desirable. So if it is content to be the sleeping partner, and leave the running of the bank in a few practioners' hands, the arrangement could work well.

Whether this is 'can do' politics or cronyism is another question, and one that will have to be answered in the heat of more general public debate.