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Last Updated: Thursday, 17 January 2008, 01:31 GMT
Watchdog exposes PFI charges gap
Electrical socket
Changing an electrical socket can be a costly business.
A watchdog has found significant differences in the prices being charged for work at schools and hospitals built under the private finance initiative.

The National Audit Office, which monitors public spending, found the amount spent on installing plug sockets ranged from 30.81 to 302.30.

One contractor put up a notice board for free, but another charged 149.71.

Edward Leigh, chairman of the Commons public accounts committee, said PFI bosses needed to get "street wise".

Changes to PFI projects should not be costing voters "an arm and a leg", said the Tory MP.

The public sector has allowed itself to be taken for a ride
Edward Leigh
Public Accounts Committee

The benchmark figure suggested by the Royal Institute of Chartered Surveyors for installing an electrical socket is between 51 and 103.

The report by the NAO - the official Whitehall spending watchdog - found that a lock could cost anything from 15.09 to 486.54, while the cost of a key ranged from 4.26 to 47.48.

In total, Whitehall departments and other public bodies spent more than 180m on changes to operational PFI projects in 2006.

On the bill was 300,000 spent by the Home Office on installing 300 new desks, and 104,000 spent by HM Revenue and Customs for a "space planning facility" to reconfigure the layout of its offices in Whitehall.

The NAO said that very often officials had not checked out the best deal for the taxpayer.

Mr Leigh said: "Public sector contract managers must be a lot more street-wise.

"For all changes, they must be eagle-eyed that the contractor is not charging inappropriately high fees."

Electrical socket: Highest - 302.30, Wirral Schools; Lowest - 30.81, Kirklees Schools
Supplying and fitting a data point: Highest - 398.30, Blackburn Hospital; Lowest - 95.74, East Ridings School
Fitting a notice board: Highest - 149.71, Calderdale Royal Hospital; Lowest - Nil, Defra offices, Cambridge

He added: "The public sector has allowed itself to be taken for a ride.

"Public sector contract managers for PFI deals have insufficient commercial expertise to negotiate with and develop effective relationships with their private sector counterparts."

The Treasury insisted that it had recently put out new guidance to ensure that full value for money was obtained when changes were made, both for new contracts and existing contracts.

Philip Hammond, Tory shadow chief secretary to the Treasury, said: "Public support for PFI projects depends on proper management of projects and demonstrating value for money for the taxpayer.

"The government is manifestly failing to achieve either of these things."

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