By Max Clarke

The government must do more to secure value for money from their extensive experiments with private finance initiatives (PFI), the National Audit Ofice said today.

By acting more as an ‘intelligent customer’, the government can better manage contracts, helping to deliver savings of £2-3 billion, the report finds. Furthermore, the government must challenge the use of private investment in pubic services, and concludes that, in the current climate, that PFI schemes may not be suitable for many projects as they have been in the past.

"The public sector should make better use of the hard won lessons from the extensive and substantial PFI programme,” summarised Amyas Morse, head of the National Audit Office.

“This means acting as a more demanding and intelligent customer, by harnessing government buying power through concerted tactics and tougher negotiation" .

While the NAO has voiced their concerns about the initiatives, unions and in particular, UNISON- the public sctor union, have long been opposed to even the part privatisation of public services. The NAO’s verdict that PFIs “may not be suitable for many projects as they have been in the past”, will be seen as a vindication of their concerns about the initiatives.

Say UNISION: All our evidence and experience shows that once services are run for private profit, the quality of care is reduced and the public service ethos is replaced by a hard-nosed profit motive. It is about who makes the decisions about caring for your elderly relatives or your children's education or housing the homeless-someone with their heart in the right place, or someone with an eye on the balance sheet.

The CBI (Confederation of British Industry), however, suggest the government would be unwise to cast away what has been a successful source of necessary investment, and that the government should be open to a range of funding options.

“PFI has already successfully delivered hundreds of hospitals, homes and schools, with the majority built on time and on budget," says Elizabeth Fells, CBI Head of Public Services Reform.

"The Government needs to use a variety of financing options. These should include PFI, as well as newer models, such as tax increment funding and pension fund financing.”