Despite the torrent, the PFI is not going away, as it provides jam today – more schools, hospitals, and police stations will be built in the next five years because of it. Whether the government can reclaim the high ground is a more vexed question. The only way to do this is to ensure that public buildings delivered through the initiative are of a high quality. That does not mean only a concern with defects and delays.
The work of the government's construction tsar, Sir John Egan, is important but not sufficient. You can have the most efficient procurement process in the world but if you don't have a decent design, you will still end up with a second-rate building.
Investment in quality means buildings that deliver services well – decent hospitals where people get better quicker, schools that create the conditions for enhanced learning, court buildings that create a sense of the dispensation of justice.
The key question is this: do public buildings delivered through the PFI offer the best return on our investment in public services? When we talk about best return, we are not talking primarily about the capital cost of those buildings, nor their lifetime management and maintenance costs. What we should really be concerned about is the efficiency of public buildings in use.
It is becoming clear to the Commission for Architecture and the Built Environment that there are two types of PFI projects. There are those, such as the prisons programme, that are based on a true design-build-finance-operate system of procurement. This is real outcome-driven PFI. If you design a prison so badly that it leads to riots, you, the operator, deal with the consequences. It is a pure form of PFI, but it is based on the private management of public services. For the many in the unions, that is an ideological step too far.
The second, more common, form of PFI is a hybrid. It purports to transfer risk from the public to the private sector, but in reality that transfer is very limited. In the context of a hospital, the consortium is responsible for heating and lighting, but has no contractual responsibility for patient well-being. This is output-driven PFI. The consortium has a limited design ambition because it has limited facilities management responsibilities.
Best value can no longer be translated as a low quality threshold and a shoot-out based on sealed envelopes – a system where design quality is value-engineered to dust
Given that the purer form of PFI is going to remain elusively out of reach of this government in most circumstances, the real question is whether the hybrid can be made to work. CABE believes it can – not perfectly, but well enough. Changes are, however, required.
First, the orthodoxy that has surrounded PFI is going to have to loosen up. Clients should be able to take much greater control – they may even have to commission designs first to communicate their aspirations and set the standard.
Second, the evaluation criteria are going to have to toughen up. Best value can no longer be translated as a low quality threshold and a shoot-out based on sealed envelopes – a system where design quality is value-engineered to dust. Quality and quantity must be evaluated together, with quality receiving a far higher weighting. The client's design advisers should be just as important as the quantity surveyors.
Finally, the clients are going to have to skill up. As the IPPR argued in its report, we have a huge proliferation of small public sector clients trying to do join-the-dots PFI at the same time as the contractual market is maturing and consolidating. Most of these clients have no experience and generally little idea whether they have procured a good or bad building until the roof starts leaking a week after it opens.
At CABE we have one simple ideology: that buildings built for the public from taxpayers' money should be functional, efficient, durable, attractive and should represent best value, not lowest cost.
Postscript
Sir Stuart Lipton is chairman of the Commission for Architecture and the Built Environment.
