1.2 Underpinning the approach to private sector involvement in public services such as PFI is the assumption that private companies are faster and more efficient than the state. Consequently, PFI supporters argue that PFI is cheaper than public procurement. Yet government claims that PFI has reduced cost and time overruns have not stood up to scrutiny.4 Five reports often cited by the Treasury are each flawed. For example, only one report claimed to compare PFI with conventional procurement. However further research has shown that the work suffered from a sample bias with selected public projects involving a disproportionately large number of very complex schemes which are particularly vulnerable to cost and time overruns. In addition the report measured time and cost overruns on public procurement projects from an earlier standpoint than PFI projects thus resulting in incompatible comparisons.5 Hence the performance of PFI projects in comparison to projects publicly-procured appears overstated and not evidence based.
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4 See Pollock A, Price D, and Player, S, (2007) An Examination of the UK Treasury's Evidence Base for Cost and Time Overrun Data in UK Value-for-Money Policy and Appraisal, Public Money and Management, 27, 2, pp 127-134.
5 See Pollock A, Price, D, and Player, S, (2007) An examination of the UK Treasury's Evidence Base for Cost and Time Overrun Data in UK Value-for-Money Policy and Appraisal, Public Money and Management, 27, 2, pp 127-134.