Q309 Chairman: Thank you very much indeed for coming. I think you know what we are about and in your case I think we are going to talk to you about PFI both in health and housing you have considerable experience in both. I think it would be fair to say please be sure to speak up for the sake of the transcript and the shorthand writers and if you would just like to briefly say your name as you begin. Do you want to make a statement or go straight into questions?
Sir Peter Dixon: I am quite happy to go straight into questions. I will just explain for those who do not know that I spent nearly six years as Chairman of the Housing Corporation where I did my best to avoid using PFI and I have spent nine years as Chairman of UCLH where we are actually the largest operating PFI hospital in England.
Q310 Chairman: So we will be very interested in hearing what you have to say from your own experience. From that point of view, could you give us a brief view as to what you see are the pros and cons of PFI projects in both health and housing?
Sir Peter Dixon: The short answer in health is that for the last 10 years it has been the only source of finance and therefore one has used it. I think there are advantages in the discipline. When our hospital was being built, we were very clear that any change was going to cost us an arm and a leg so we did not make any changes, and that was it, but that was a matter of discipline on us. We could have done so but we knew it was going to be very expensive and we did not wish to incur additional expense. In housing I find it quite difficult to see any serious advantage for PFI, particularly because as far as housing associations were concerned there was a very cheap and very effective alternative in borrowing money from the banks, on very, very fine margins, not as cheap as government finance, but too cheap in my view, and therefore there was no requirement for using PFI as far as housing associations were concerned. Where local government did use PFI for housing improvement, it was typically because they had no other source of capital funding and therefore they used it. However, I believe it was unnecessarily expensive and also unnecessarily restrictive.