Unions press Labour for PFI inquiry

Tony Blair delivers his keynote speech on Tuesday

Trade unionists and Labour Party delegates are calling for a full independent inquiry into the government's use of private money to build hospitals and schools.

The change of tactics emerged at the start of the Labour Party conference in Blackpool with unions moving away from demanding a moratorium on private finance initiative (PFI) projects.

The unions will confirm their strategy on Monday

A motion highly critical of the policy will go before the conference on Monday.

It could result in a rare conference defeat for Prime Minister Tony Blair after a number of constituency parties initially expected to back the government came out in support of the critical unions on Sunday night.

Earlier in the day Mr Blair said the pace of reform in the UK's public services must be quickened - whatever the internal difficulties it causes in the Labour Party.

Halting PFI projects would be absurd, when they were delivering projects improving the lives of many people, he said.

'Prudent way forward'

John Edmonds, general secretary of the GMB union, said on Sunday: "The government has concentrated all its attack on the idea of a moratorium stopping work on hospitals and schools.

"Well, we will simply take away that straw man. An independent review looking at what is going on is a prudent way forward."

The public services are at the very top of our agenda

Tony Blair

The issue of using private finance for public services will be the subject of an emergency debate on Monday after it topped the ballot for subjects party delegates most wanted to discuss with 83% of the vote.

Union leaders claim PFI provides poor value for money and large profits for private companies.

Mr Edmonds said there had never been a proper independent review of PFI, even though billions of pounds of taxpayers' money was being spent.

"The government needs to respond to the concerns of the British people," he added.

Unison general secretary Dave Prentis and Derek Simpson, joint general secretary of Amicus, added their support to an examination of PFI, with Mr Prentis saying that no one in government seemed to be listening to concerns.

'Extra investment'

Earlier, Mr Blair told BBC One's Breakfast with Frost that traditional ways of delivering healthcare and education were not enough for today's world.

"The public services are at the very top of our agenda," the prime minister said.

"And I believe we have to up the pace of reform, not slow it down ... whatever the difficulties internally within the Labour Party, difficulties in taking on certain interest groups with the country."

Edinburgh's Royal Infirmary was built with PFI funds

Mr Blair, who will make his conference speech on Tuesday, said he understood people were worried about plans for involving private companies in public services.

But the promised extra investment showed government commitment to public services, he argued.

Labour Party Chairman Charles Clarke later struck a more conciliatory note on the issue.

He said: "I wouldn't accept a review that had the possibility that we wouldn't proceed with PFI.

"I think that getting investment into our schools and hospitals, to replace the underinvestment over decades past, is critically important.

But he would accept a "discussion" about how the government could improve operation of PFIs in particular ways, he added.

The leadership wants to use the 2002 annual conference to showcase the government's "investment and reform" programme for key public services.

That is expected to be the main theme of Mr Blair's keynote speech on Tuesday, in which it is thought he will announce a significant new domestic policy initiative.