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Friday, 27 September, 2002, 10:17 GMT 11:17 UK
Blair woos unions over PFI
Tony Blair
PFI has delivered services more swiftly, says Blair
The prime minister is taking up the campaign to win over trade union support for the controversial private finance initiative (PFI).

Tony Blair is following in the footsteps of John Prescott and Gordon Brown, who have already insisted PFI is speeding up the construction of new schools and hospitals.


It is time to acknowledge that the 1945 settlement was a product of its time and we must not be a prisoner of it

Tony Blair

The persuasion effort comes as unions demand a temporary halt to all new PFI projects while an independent review is carried out.

Mr Blair is launching a pamphlet on Friday to trumpet the merits of using private money to fund new hospitals and schools and stresses that unions will not be allowed a veto on public service reform.

Even more must be done to encourage private companies to become involved in providing public services, he argues.

Trapped warning

Mr Blair insists that hospitals and schools being built under PFI are being delivered on time and within budget.

His pamphlet has been published in the Guardian newspaper.

In it, Mr Blair warns: "Only if we make the necessary changes to our public services will we be able to say this Labour government lived up to the high ideals and practical achievements of the government of 1945.

Bill Morris, general secretary of the Transport and General Workers Union
Bill Morris voiced his opposition to foundation hospitals
"It is time to acknowledge that the 1945 settlement was a product of its time and we must not be a prisoner of it."

The strength of the trade union fightback against the private finance initiative has alarmed ministers.

Union leaders argue private companies can make "juicy" profits out of the deals, which they argue only "mortgage the future" of public services.

Unison general secretary Dave Prentis said: "The government should just throw in the towel and let an independent inquiry decide the future of PFI instead of tearing the party apart.

"The bottom line is that the public and public sector workers have a right to know that they are getting the best possible public services at the best possible price.

"But if the government think they are right, let them prove it."

'Here to stay'

The issue is likely to provoke a heated conference confrontation as unions call for a moratorium on new PFI schemes while their effectiveness is reviewed.

Health Secretary Alan Milburn countered that they were under constant review from independent watchdog the National Audit Office.

Typical site scene
New building schemes are producing controversy
"People need to know that PFI is here and it is here to stay," said Mr Milburn.

"It means quite simply that we can get more modern schools and hospitals built more quickly for communities sometimes that have been waiting for them for decades."

Mr Milburn also said the government was going ahead with plans for foundation hospitals - where top performing NHS trusts would have freedom over how they work.

'Creeping privatisation'

That particularly worried Bill Morris, general secretary of the Transport and General Workers' Union.

Mr Morris said the plans threatened to create a "two-tier" health service.

"Foundation hospitals are creeping privatisation and an abandonment of the 1945 settlement," Mr Morris told Today.

On Thursday, ahead of next week's Labour Party Conference, Gordon Brown defended the government's policy of involving private companies in the running of public services.

Mr Brown stressed that there would be no backing down and no moratorium, whatever the Labour Party conference voted.

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 ON THIS STORY
The BBC's Nicholas Jones
"Some of the biggest unions are lined up against the government"

Public pay battles

Leadership battles

Labour and the unions

Analysis

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See also:

26 Sep 02 | Business
23 Apr 02 | Health
11 Jul 02 | Politics
27 Sep 02 | Business
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