146. A significant part of the benefit of private finance projects comes from the whole life approach to contracts that last for 25-30 years. Since amendments incur charges, projects requiring relatively few changes are better suited to this type of procurement. If the nature of the requirement cannot be well identified at the outset then it will be difficult to write successful long-term contracts. So road projects, for example, seem particularly suitable for private finance procurement. Similarly, new schools can be well specified in advance and are thought to be more successful than refurbishment where there are more unknowns outside the contractor's control (Mr T Martin Blaiklock p 285, Mr Buxton Q 112). Sir Peter Dixon pointed out that the more unpredictable a refurbishment scheme, the more difficult it was to have a fixed price and to manage that risk appropriately (Q 316).
147. IT projects were widely viewed by witnesses as unsuitable because they are difficult to specify and define at the outset. The pace of technological change means that requirements frequently change as well (Dr Stone Q 25, Centre for Public Service Partnerships p 287, Mr Humpherson Q 232). Councillor Richard Kemp, Local Government Association, said of IT projects: "By the time you have actually gone through the process the specification will have moved on" (Q 94).
148. Nevertheless, problems with IT projects are not confined to those undertaken via private finance. Sir John Bourn believed that under certain conditions IT projects could be appropriate for private finance: "If you set about it in a sensible way, were not too ambitious, knew what you were doing, had trained people, consulted those who would actually have to operate the projects then you could make a success of it. I think all the difficulties have led the Treasury to think for the present time-I would not quarrel with this for the time being-that you would not attempt to use PFI for IT projects but I think the time could come when you could do that again" (Q 361).
149. Private finance has been widely used in the NHS. But Mr Blaiklock argued that hospitals were not suited to the long-term, relatively stable ideal needed for PFP contracts "as the way patients are treated continuously evolves, requiring different public service assets, as technology advances" (p 285). However, Lord Crisp, formerly Permanent Secretary at the Department of Health, argued that for private finance across the NHS, "the positives outweigh the negatives" (Q 206).