Memorandum from the Confederation of British
Industry (CBI) (PPP 13)
The CBI is the UK's leading business organisation,
speaking for some 240,000 businesses that together employ around
a third of the private sector workforce. Our membership ranges
from multinational organisations through to SME and trade associations.
CBI London's priority is to help shape policy with the aim of
strengthening London as a place to do business and maintaining
its competitive edge, and transport plays a central role in this.
Business is a funder and user of public transport
in the capital. Carrying over three million passengers a day,
the underground network is fundamental for business. The tube
modernisation programme is vital to the economic well being of
London. We continue to urge the government to demonstrate strong
commitment to the modernisation of the underground network: In
the latest CBI/KPMG London Business Survey of business leaders
in the capital, 96% said the tube modernisation programme is vital
for the capital.
The tube PPP has paved the way for the largest
improvement programme the tube has ever seen—to modernise
a system that has suffered from decades of under-investment. And
some real improvements are being felt on the ground: in the London
Business Survey over a quarter said the service was good or excellent,
up from 12% in the previous year. However, there is clearly further
room for improvement.
Tube Lines's performance clearly shows that
the PPP approach can bring substantial improvements to the Underground
on time and on budget.
For example some of their key achievements are:
— adding an extra car to every Jubilee
line train at the end of 2005, adding 17% extra capacity
— replacing or refurbished over 90km
of track
— providing upgrades to 47 stations.
— virtually eliminating graffiti
— installing new lifts to make a number
of stations fully accessible
— deploying innovative methods to speed
up escalator installations.
More generally, PPPs have brought substantial
benefits to British public services. They provide financial and
professional benefits which cannot be brought by government alone,
and will become increasingly important in the future as public
spending becomes more constrained.
For nearly two decades, and particularly since
1997, the Private Finance Initiative has been used to deliver
a range of public facilities, including prisons, schools, hospitals
and infrastructure projects. PFI has enabled a significant investment
in the UK's public assets and projects are delivered on time and
to budget. The vast majority of these are successful.
The collapse of Metronet should not be used
as a premise to undermine the model of PPPs. Rather, the priority
should be to complete the administration process, review the contracts
and re-let them to another provider, preserving the principle
that the risk should be shared between government and the provider.
The modernisation of the underground is vital to business and
enhancing London's reputation as a world class city.
October 2007
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