Memorandum by Mr David M Adamson
I do not wish to duplicate others' comments
and have only the following comment, some derived from my time
procuring in universities.
Higher Education premises managers strongly
opposed being required to use pfi per NHS (I had a private meeting
with William Waldergrave mid-90's), firstly, because as owner-occupiers
universities could and can take a long-term and better view of
the value of flexibility in use of buildings; secondly, in-house
procurement staff are generally as competent, often more competent,
than pfi procurers, and thirdly, and this is generally true for
all "informed" clients, the amount paid for risk transference
was expected to be excessive because of over-statement of that
risk; that has been and continues to be the case. While I was
director of construction policy at HMT/OGC (2005-07) few contradicted
the above views, and there was set up a sub-committee of the Public
Sector Construction Clients' Committee (chaired by Chris Kelly)
to review these, and other, aspects of pfi; however, after my
retirement I gather that this fizzled out--the Main Contractors
have a surprisingly strong and pervasive lobby in the Civil Service,
far stronger that the remainder of the construction supply chain
(which actually does the work), and far stronger than is good
for the tax-payer. As years have rolled on, one element of waste
intrinsic in pfi has been caused by exclusion of designers, notably
architects and building services engineers (those responsible
for sustainability) from the early concept design stages, and
then to require them to produce too many alternative designs,
even before their appointment. These two matters have been addressed
to a fair extent in Smart pfi, but more change in this
direction is needed. What has not been properly addressed is the
exclusion of representative input from the real building/infrastructure
users; in some pfi such as BSF, there has in some cases been too
much involvement of current users who have short-term view; what
is needed and not heard, is the input of the longer-term assessment
of requirement by the user community. One further recommendation:
often the pfi consortium finds it convenient to appoint the facilities
manager near, or even at, the end of the construction phase rather
than earlier when those due to run the building can give their
view during design when such advice can be of more use—hospital
projects are particularly bad for this.
Most of the above applies much less or not at
all to most forms of PPP, which for competent user occupier clients
is a less costly and more user-friendly procurement route.
In summary, pfi is not cost-effective because
risk is over-costed, designers and good representative users of
buildings/infrastructure are brought in too late, because many
clients have, and most should be required to have, in-house procurement
teams more competent than pfi teams. PPP is in most aspects preferable;
of course, the point of pfi has been to keep capitals costs off-balance
sheet, but few regard this view as valid, or a good enough reason
to pay for pfi.
David Adamson
November 2009
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