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Report into Royal Armouries PFI Fiasco shows Government should think again - Wallis
December 12, 2001 12:00 AM
Diana Wallis, Lib Dem Euro-MP for Leeds, has called on the UK Government to think again about future plans for Public Finance Initiative projects in the light of a damning report into the Royal Armouries fiasco.
"The whole idea of PFI is that it shifts financial risk from the public sector to private companies in return for profits," said Diana Wallis MEP. "This example is just one of many that show that it simply doesn't work."
The report outlines how the Royal Armouries in Leeds had to be bailed out by the Government to the tune of £10million. In the new deal negotiated to save the museum, the public sector lost out even more. As the report outlines, the private company retained the most profitable parts of the Armouries - hospitality, catering and car parking - leaving the taxpayer with the loss-making aspects of the museum.
"The report's conclusions criticise the government department's handling of the contract and its subsequent management in nearly every paragraph," continued Diana Wallis. "This is clearly not the way to finance public projects if it ends up costing more in the long run."
"The European Parliament is currently considering a number of proposals concerning the structure and granting of public contracts. These EU rules should ultimately lead to better outcomes for such projects."