Q51 Mr Touhig: The Treasury is not concerned that a small number of very large companies is getting control of major PFI projects?
Mr Kingman: We would be very concerned if there were a sense that there was less competition in the market, but we believe that there is healthy competition in the market.
Q52 Mr Touhig: Thirty or forty years ago, local authorities set up their own direct labour organisations to build and maintain property-schools and the rest of it-because cabals of major companies were being set up to bid for the work and control access to it. Have you thought of establishing a publicly owned and financed company that would be a benchmark and that would provide some competition for the organisations in the market?
Mr Kingman: Not as such, but let me return to the general record of PFI. Compared with public sector procurement it has been markedly more successful-PFI investment projects have been completed on time in almost 90% of cases, whereas three quarters of publicly financed projects overran.
Q53 Mr Touhig: Thinking out of the box, that one, was it?
Mr Kingman: I think that PFI was about thinking out of the box.
Q54 Mr Touhig: No, I mean my suggestion of setting up your own publicly financed company to compete and set a benchmark. That is a tried and tested practice in local government. It has worked very successfully and has delivered value for money.
Mr Kingman: I could not claim to have studied the idea in detail, because we have not studied it in detail.
Mr Touhig: If you decide to take it on, recognise that you heard it here first. I think that my time is up. Thank you.
Q55 Mr Philip Dunne: I remind the Committee of my declaration in the Register of Members' Interests. I am the director of a small fund management firm that has invested particularly enthusiastically in PFI refinancings and other projects, so I understand the economic attractions for the investor. You referred, I think, to the fact that the Treasury has two members of staff who advise on individual projects as they arise. How many are involved in monitoring the existing PFI schemes?
Mr Abadie: Within the Treasury, or across Government?
Mr Dunne: Within the Treasury.
Mr Abadie: Within the Treasury, we have a team of something between 10 and 12 people. There are a couple of people from the private sector, such as myself, and there are two senior civil servants in the team. We are supported on a contract basis by Partnerships UK, which provides us with additional depth and resource if we need it.
Mr Kingman: To give a sense of the scale, that is as large a team as we have shadowing the entire Department of Health.
Q56 Mr Dunne: Presumably you require full financial information on each project that qualifies for PFI, from any Department.
Mr Abadie: We have a process whereby we obtain information on a semi-annual basis. That information can include the value of deals that were closed in the year and also the forward commitment-the unitary charge commitment going forward. When a deal is closed there is also a process of data collation on the transaction, after which the data are stored on a database held by Partnerships UK.
Q57 Mr Dunne: Does that mean that, if I were to ask you for financial information on a specific project, you could provide that?
Mr Abadie: The database needs updating-particularly for older projects-but it is very much up to date for transactions that have taken place over the last three to four years.
Q58 Mr Dunne: I ask that question because when I asked, in a parliamentary question, for a full list of all PFI projects by Department, I was told that that information was not available.
Mr Abadie: That is surprising. We have a full list on the Treasury website of every single signed transaction. That is readily accessible.
Q59 Mr Dunne: Does it provide information on rates of return to investors at different stages of the project?
Mr Abadie: No. On the website we have a list of all the signed deals, and information on when they were signed and by whom-by which Department-the name of the project and its capital value. The rates of return, to the extent that we have that data, are included in the Partnerships UK database, which is available to the public sector.
Q60 Mr Dunne: Do you not require disclosure of rates of return as part of the contract?
Mr Abadie: No. Under the standard contract that we put out, authorities are entitled to ask for that information and any information about the contractor. Whether they ask for that data is up to them. One of the helpful recommendations made by the NAO in the Report is that we should be more systematic in that respect and request that data.