Q61 Ian Swales: Well, I was going to come on to that, but if, because of the nature of the deal we've done, there turns out to be some kind of super-profits in a particular deal, is it not possible to make sure the taxpayer actually shares in that benefit somehow by the way the deal is structured at the start?
Peter Coates: The history of gain shares is a long one, and the early deals, the Treasury rules were there should be no gain shares and no profit shares.
Q62 Ian Swales: Why would they have a rule-
Peter Coates: Why? The Treasury rules were at the time that way.
Q63 Chair: Do we know? Amyas, do you know the answer to that?
Amyas Morse: No, I don't.
Q64 Mr Bacon: The answer is that-at least this is what I've been told-when the PFI market was quite nascent, it was seen as a much higher risk because it wasn't so well understood, and it was to encourage people into the market.
Ian Swales: Okay. Well, I can-
Mr Bacon: And the McAlpines of this world licked their lips and saw a good thing.
Amyas Morse: I'm sure that's right. If you will forgive me, Ian, for a second, it's just worth saying something, and I'm going to say this: our Report on Hospital PFI did say that they are currently good value for money. It's just worth reminding you of that before we go on. I don't want the tone to develop so much into-
Q65 Ian Swales: No, I understand. It was just about the structure of deals. Are those Treasury rules still in place or are they under review, and would you like to see them changed?
Peter Coates: I'm not aware of any rules around the trading of equity values, and I think it's very difficult to restrict a flow of equity because of the different ways equity can take the value out of their investments. Other areas of gain share are now different, of course, but the principal area of gain share that's changed is refinancing gains, where it went from zero and then we had, I think, 10% and then 30%, which is now 70%. What the private sector say to us is it's not worth refinancing anymore, because at that share, we get all the benefit.
Q66 Nick Smith: I've quite warmed to your argument today, Mr. Coates. I'm sort of persuaded by your point about stop-go and that, in the round, PFI has led to many new hospitals that may not otherwise have been built. I travel around the country, you do see that, and perhaps it's rose-tinted glasses, but I think, by and large, I give a tick to all of that. It's not quite the return to Victorian investment in public buildings, but you see lots of new hospitals, so, I think, in the round, that's a good thing. But clearly, around the table, we're unhappy about this business of high maintenance costs and poor satisfaction rates around the country, and you are also clearly short of capacity to do something about that, and we'd be very interested in your views about that, because it's got to be put right.
Peter Coates: From memory, I don't think the Report says that maintenance is expensive. I think it says they are dissatisfied with it.
Q67 Chair: It does, on yours, say that maintenance in PFI is more expensive than non-PFI, if I can find the table.
Peter Coates: Okay.
Q68 Chair: It does actually say that. It does say, on anything else-just to put it into context-that PFI is cheaper on catering etc.
Peter Coates: It's so unusual to be asked a question about the Report that I'm a bit shocked.
Chair: But on maintenance, it is more expensive.
Peter Coates: I was a bit shocked to get a question about the Report then.
Q69 Nick Smith: But the thing that perplexed me was this business about the variation in costs of feeding a patient, between £3 and £12. I think we should probably spend more on feeding patients in hospital to help with nutrition and diet and all of those things, but can you just give us a bit more information about this, because it just feels very odd? Peter Coates: I'll be glad to. May I go back to your question about maintenance, because we have started discussing-we do have schemes that have either just started or are about to start a procurement process for a new hospital. So, PFI isn't over in health; it's just starting a new wave of half a dozen or so hospitals. We've raised with the trusts this prospect of putting in some kind of regular benchmarking or testing on maintenance and, in effect, the right to say "I'm not going to have it anymore because I want to save some money". The feedback is pretty lukewarm about it, quite frankly, because the hospitals take the view that the benefits of having a new hospital that's perfectly well maintained in terms of patient satisfaction and patient experience are such that they actually think it's not a bad use of money. I agree it constrains choices elsewhere, but that's what money's all about in terms of prioritising your choices.
Chair: Nick, will you be really cross if we come back to that when we do the hospitals?
Nick Smith: No, sure.
Chair: We'll come back to the variations in standards, but let's stick with this.
Q70 Nick Smith: Could we have more information on maintenance, then, because the feedback from hospitals and the issue with the costs and satisfaction doesn't quite feel right.
Peter Coates: I agree the Report points out a lot of dissatisfaction with it. What would you like me to do? The Report and the survey say people are dissatisfied.