Q161 Mr Bacon: So you have been there just two years. How much longer are you expecting to stay?
Mr Abadie: John?
Mr Kingman: Richard will shortly be leaving us and returning to PricewaterhouseCoopers. I should say that, from our point of view, having someone with his expertise is vital in ensuring that we can run a professional policy operation.
Q162 Mr Bacon: Your job is head of PFI policy.
Mr Abadie: That is correct.
Q163 Mr Bacon: It strikes me as interesting that the Treasury, for something so important, had to go outside on a temporary, seconded basis to find someone to drive such a significant policy.
Mr Kingman: I would not see that as a sort of second best. On the contrary, I would see it as a much better arrangement from our point of view. This is a very technical area, and I think the Committee would be the first to tell us that we do not want to be hoodwinked by the private sector. I think it is absolutely essential that we have in the Treasury, as we had for a number of years in a number of Richard's predecessors, senior people from the private sector to help us with developments.
Q164 Mr Bacon: I am running out of time, but I would just like to ask you a question about the secondary market. You drew a distinction between refinancing on one hand, which you called an important change, and changes in the ownership of the equity on the other, which you said did not affect your rights. Plainly, if you sell a company with a series of rights, those rights are then held by the new owner. Are you saying, therefore, that you have no interest in who the owners of these companies are?
Mr Kingman: No, I am not saying that. I am saying that for us to have good grounds and for it to be sensible value for money, clawing back gains needs to be in relation to some change in our contractual position and our rights as a purchaser.
Q165 Mr Bacon: But you have no control over how frequently these companies are bought and sold, do you?
Mr Kingman: No.
Q166 Mr Bacon: Yet, as we know from the highly developed capital market for companies, who owns a company can be a hugely significant fact in terms of how well it performs. When companies merge and are taken over, sometimes they do very well as a result, and sometimes they do very poorly as a direct result of the change of ownership, so ownership has a big potential impact on the delivery of service, does it not?
Mr Kingman: I am not sure that we would see PFI as different from any other form of procurement. If we buy computers from IBM, that does not give us rights over who owns IBM.
Q167 Mr Bacon: Yes, but buying a service and buying a computer are not the same thing. Buying management services, buying intellectual services and buying commodities are not the same. You are not trying to suggest that buying a series of services, which is essentially what PFI is about, is like buying a commodity, are you?
Mr Kingman: No, but I think the same principles would apply for anyone we were buying services from. If we buy services from a large consulting firm, we have no rights over who owns the consulting firm.
Q168 Mr Bacon: No. So you are quite content that the secondary market should develop and grow and that there should be large portfolios of PFI companies offering services to schools and hospitals, and that you will not necessarily know who the underlying owners are.
Mr Kingman: It may well be sensible for the public sector purchasers to know who their investors are. We clearly need to have a good picture in the Treasury of what the market is like and what the broad position is like, but, yes, we are content with the situation you described.
Mr Bacon: Thank you.
Q169 Chairman: You have been calling the tune as far as the other Departments are concerned in terms of the approach to PFI, yet the Treasury is singularly reluctant to send witnesses to Select Committees, other than to the Treasury Committee. Do you think it is right that when you have a cross-Government role, the Treasury is rather reticent about appearing to defend its position? For example, there were complaints in relation to the hearings on the tube projects.
Mr Kingman: I am afraid that I am not sure that I am an authority on our position on representations at other hearings.
Q170 Chairman: What has come over today is that the Treasury calls the tune. The others are allowed to play to the hymn sheet-that is a rough analogy-but essentially you are the people who state the ground rules. Yet when Select Committees want evidence of the thinking behind the ground rules, it is sometimes difficult for them to get the Treasury to provide witnesses to individual departmental Select Committees. Can you at least concede that that presents certain difficulties?
Mr Kingman: I am afraid that I am simply not aware of the position in relation to other Committees.