Examination of Witnesses (Questions 220
MONDAY 15 APRIL 2002
220. Can you provide a full note to the Committee
as quickly as possible?
(Mr Crisp) I will provide a note on what the Private
Partnership arrangement is and why it will provide, we believe,
better value for money.
Mr Williams: A full and detailed note!
221. The Committee would like to know where
is the private sector risk in this arrangement?
(Mr Crisp) Okay.
222. Do you want to answer that now?
(Mr Crisp) If you would like that put in the note,
we will put that in the note.
223. Well, I think it would be quite interesting
to have your comments now.
(Mr Crisp) The private sector risk in this is the
fact that they are putting assets into this.
(Mr Crisp) They are purchasing this from us as has
225. At what price?
(Mr Crisp) And using their expertise. At the price
we might get on the open market now. The point about this is to
get better value for the NHS from this arrangement.
Chairman: We are still trying to understand
the risks that they are undertaking. It is not entirely clear
226. If you refer to Paragraph 3.33 it says
that the average cost of sale across all disposals was two per
cent of average prices. Of course, what we would have to be able
to see is that the PPP arrangements that you are instituting mean
that the average cost of sales is going to cost the Department
less than two per cent of those sale prices. Certainly from the
remarks that Mr Williams and the Chairman have made, it is very
difficult to see where that will come and where the risk element
that the private sector is bearing here lies.
(Mr Wearmouth) We could provide a full and frank account
of this. There have been a number of option appraisals undertaken
by international, professional property advisers on what would
be the best option to proceed. We are following the best option
to proceed and in relation to town and country planning permission,
the NHS and NHS trusts are no different to any private sector
organisation when it goes to attempt to get town and country planning
227. There is a full series of studies?
(Mr Wearmouth) Yes.
228. Have these studies been shared with the
National Audit Office?
(Sir John Bourn) Not yet but it is a subject which
we intend to examine. The whole of this PPP will be one of the
subjects we shall be examining.
Mr Williams: On a point of order, Chairman,
in view of the unbelievably unsatisfactory and nebulous answers
we have received from the witnesses, I hope the Committee will
reserve the option of calling them back again if we think it is
appropriate when we receive this note, rather than waiting until
it has all been set up and happened and we then get a post-dated
detailed examination by the NAO. So you may be back here in couple
of weeks' time, gentlemen.
229. We certainly look forward to seeing this
note. I am sure Mr Crisp is very happy to assist us in any way
he can. There is one last question which is perhaps a bit easier
than the last from Mr Geraint Davies, which is a good line of
questioning from his constituency point of view and a London point
of view about leasing land in London and the ever rising value
of land in London. He asks why do not you lease land in London
for 20 years so you do not lose it forever?
(Mr Crisp) You mean leasing to other people land which
we regard as surplus, whether it is better to dispose of it on
a long lease?
230. Do you want to answer that now?
(Mr Crisp) I am not sure I can give you a straight
answeran immediate answer on that.
231. We only want straight answers! Mr Wearmouth?
(Mr Wearmouth) If we carry out any PFI transaction
the land is normally leased on a long lease to the PFI provider,
which is the hospital. If we are undertaking any developments
that may have future use in the NHS, for example some of the residential
accommodation refurbishments that the NAO looked at in the Report,
we may retain the long leasehold of the land there as well. It
is all down to the specific case on whether we retain it or not.
Geraint Davies: Can I suggest to Mr Crisp that
he does look at that option in the future because of the problems
we have already discussed in this Committee.
232. I think that concludes a very interesting
session. The press gallery and public gallery are hardly heaving
with people but the fact is this is a very important subject.
The NHS is a hot political potato. All we ask in this Committee
is that you abide by your own guidelines and you maximise the
benefits available to the NHS for all of our benefit. I think
it has been a very useful session. We are very grateful to you
(Mr Crisp) I trust we will be able to reassure you
when we return with a paper on the PPP.
5 Ev 24-28, Appendix 1. Back