The public sector face is being ‘outwitted' by private sector contractors in PFI deals, according to a report from the Committee on Public Accounts. As a result, the sector is failing to maximise the gains from PFI debt-refinancing deals which it should be making. Speaking after the report on PFI debt refinance, chairman of the committee, Edward Leigh MP, said public sector officials were often ‘painfully lacking in commercial experience'. ‘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.' The committee found the proceeds of PFI debt-refinancing deals for the private sector were ‘well short of expectations'. The proceeds of refinancing were expected to be in the region of £175-200m when it was introduced in 2003. So far, the figure is only £93m. The committee also found public bodies were unable to produce financial information about their PFI deals quickly. Mr Leigh added: ‘The Treasury must keep the working of the PFI equity market under close scrutiny to make sure the public interest is not being compromised.' The findings of the 25th report from the committee echo those from an Institute of Public Policy Research (IPPR) report in 2001. The Building Better Partnerships report warned that PPP negotiations were hampered by the inexperience of local authority staff negotiating with large firms. The report by Gavin Kelly, now an adviser to the Treasury, argued that major changes would need to be made to PPP to improve public services, but warned they were not a panacea for failing services.
