Public Sector Wages

Government scraps PFI-funded IT projects

By UNISON

The British government has decided that information technology projects mounted under the private finance initiative (PFI) don't offer good value for money.

Recent government-sponsored IT projects that have used private contractors have run into serious problems.

Examples include recently-admitted difficulties with the Child Support Agency system, the Criminal Records Bureau, and a number of air traffic control and passport application processing systems.

PFI will replaced by "procurement models better able to deliver" and no government PFI-funded IT projects of up to £20m will be approved.

In a just-published report by the Treasury, PFI: meeting the investment challenge , civil servants acknowledge problems with getting PFI IT projects to work.

The main reason, it says, is the high rate of change in a big computer systems project, where requirements can change on a regular basis.

When this happens the contract must be renegotiated - almost always to the supplier's benefit, admits the Treasury.

"IT PFI projects were moderately successful," says the study, "but the majority of more successful projects renegotiated their contracts after signature to achieve ongoing flexibility, moving away from the mainstream PFI focus on contractually defining outputs," it said.

Critics such as UNISON continue to claim that PFI is also a bad idea for all large-scale infrastructure projects such as new hospitals, schools, housing and defence projects, as they tend to cost the taxpayer more over the long term and often result in inferior finished results.

© 2001 Community & Public Sector Union - State Public Services Federation (CPSU-SPSF) - National Office

http://www.cpsu-spsf.asn.au/latest_news/public_sector_wages/20030718_pfi.html
Last Modified: 15 Nov 2005