Laura Sharman 24 May 2017

PFI: under the spotlight

PFI: under the spotlight image

The Private Finance Initiative (PFI) - which became a popular way of delivering new schools or hospitals in the late 1990s - has been criticised heavily in the past for the debt they have saddled the public sector and taxpayers with.

The National Audit Office has previously warned that there is little evidence that the use of PFI delivered better value for money than other forms of procurement, and there has been very little opportunity for public authorities to obtain further efficiencies during the long contract periods.

However, a new report has questioned the safety of public buildings built under PFI arrangements, with councils being warned hundreds of properties could be unsafe.

The inquiry was conducted after serious building defects were discovered in PFI schools across Edinburgh last year. The problem was uncovered after a wall collapsed into the playground of a primary school, sparking safety concerns and the subsequent closure of 17 schools for several months.

The inquiry concluded basic defects in construction and a lack of proper quality control led to the building failures. However, it also examined what impact the council’s use of the Public Private Partnership (PPP) model had on the quality of the build.

Edinburgh City Council was found to have a ‘sound rationale’ for their decision to adopt the model for the funding and procurement of the schools. It added the approach adopted was very typical for the time.

However, it did find that ‘aspects of the way in which the PPP methodology was implemented on these projects did increase the risk of poor quality design and construction’.

The report added: ‘There was an over-reliance on the part of the council, without adequate evidence, that others in the project structure, including those building the schools would comprehensively fulfil this essential role.’

Although there were no fatalities in the incident, the inquiry found it was ‘mere timing and luck’ that the collapse of the wall did not result in the deaths of any children.

It added that councils ‘would be naïve’ to assume other properties built around the same time and using the same procurement regime would not put the public in danger.

As a result of these findings, all local authorities in Scotland have been told by the Government to undertake a review of their school buildings.

However, as emphasised by the inquiry, it would be wrong to assume contractors would ‘apply a better standard of quality assurance on other building types’.

‘If these defects are present in school buildings, there is also a likelihood that they are present with similar frequency in other buildings that contain large masonry panels or where masonry panels are required to be tied back to a structural frame,’ it said.

The Royal Incorporation of Architects in Scotland (RIAS), contributed to the inquiry and warned lives could be at risk if public bodies did not review the quality of the buildings.

President of the RIAS, Willie Watt, said: ‘The message is simple and the responsibility of all commissioning authorities is clear. An early process of inspection by appropriately qualified experts should proceed as urgently as the various public commissioning authorities, local, health and governmental, can muster the skilled individuals who can do this work.’

However, it is not just public bodies in Scotland that should heed the warnings emerging from the inquiry. The Royal Institute of British Architects (RIBA) said it had long had concerns about the use of PFI models.

‘The RIBA has long made the case for improved procurement in all sectors, for all building types,’ said Adrian Dobson, RIBA’s executive director member.

‘With regards to current PFI models, we have raised particular concerns about the lack of emphasis placed on design quality and the wasted money, time and effort created by an inefficient system of procurement.

‘In Edinburgh, as is fairly usual with PFI projects across the UK, the design team appear to have had little involvement over final build quality. We are concerned that skilled architects may be associated with construction faults outside of their control. Clearly in PFI procurement, it is especially important that the client pays particular attention to any concerns raised by the professional team, who do not have a direct commercial interest in the project.

‘We would also like to see all PFI clients giving proper focus and resource to independent scrutiny of their contractors’ work, and encourage the use of a clerk of works, or an experienced site architect, as recommended by John Cole in his very thorough expert review.’

This feature first appeared in Public Property, a new supplement launched by LocalGov to reflect the growing involvement by local authorities in the commercial property market. To see an e-book version contact Laura Sharman at l.sharman@hgluk.com

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