Local council officers are being outwitted by the private sector when it comes to refinancing deals, a report from the Commons Public Accounts Committee will report today. The Times
The report finds that the proceeds for government from refinancing private finance initiative (PFI) projects total only £93m, compared with the £175m-£200m forecast four years ago by the Office of Government Commerce.
PFIs are typically set up to build and manage schools and hospitals, and are often refinanced once construction has been completed.
Committee chairman Edward Leigh said: 'Local public sector officials taking forward PFI projects such as hospitals or schools are often painfully lacking in commercial experience. The ill-conceived Norfolk and Norwich hospital refinancing in 2003 demonstrated this all too clearly.
'Staff negotiating the fine print of refinancing clauses in contracts, where the risks to the public sector can be high, must be trained so that they are not outwitted by their commercially sophisticated private sector counterparts.'