The problem Brown is facing is not with money; that is there. But the procurement skills to deliver new Labour's new Britain are not. And Whitehall knows it.
The response has been to strengthen Whitehall's command and control over public investment. In the past two months, the departments of health and education have appointed "tsars" to oversee their capital spending programmes. Similarly, the Department of Transport has dispatched headhunters to find someone to look after its public–private partnerships.
The authoritarian implications of that term "tsar" are significant – they will have enormous power over their domains – but their key skills will be as dealmakers. Their common objective is to ensure that the government's building programme shows tangible results this side of a 2005 general election. A source close to Whitehall says: "There is a recognition that there is a capacity constraint on good, deal-orientated people – not the brickies or the people on site. It's the deal people that need to negotiate with the private sector. I'm now just waiting for the defence guys to wake up."
PFI is the government's procurement true love. But it can take two years or more to get from tender to financial close with a contracting consortium. In July, the Office of Government Commerce was forced to issue guidance on the standardisation of PFI contracts to speed up the process – minor details were being dealt with on a stupifyingly inefficient case-by-case basis. But negotiations remain protracted, and this has prompted Whitehall to search for key players to drive the procurement process.
The education tsar, Peter Stanton-Ifes, started his role in the newly created post of schools programme manager at the DfES on 18 November. His is a deceptively unglamorous title. The department is banking on Stanton-Ifes – whom it poached from the OGC, where he was the head of the PFI Review Group – to co-ordinate its £3bn-a-year school building programme.
The job will become tougher next year when it is likely to pilot framework agreements with contractors and project managers to oversee the refurbishment of clusters of secondary schools. This will be at the heart of school standards minister David Miliband's plans to refurbish every secondary school in the country over the next 10 years. There are also similar plans for the country's 1900 voluntary-aided Church of England schools.
Stanton-Ifes is well regarded. Chris Liddle, chairman of PFI specialist HLM Architects, describes him as "a good guy". At the OGC he led the team analysing the viability of council PFI projects. Stanton-Ifes' boss, capital and building divisional manager Ken Beeton, is known to believe that the expertise Stanton-Ifes gained in this role is vital to deliver the increased schools programme. He is seen as someone who can take a strategic view and cut through the minutiae in negotiations with contractors. As a Whitehall source puts it: "Peter Stanton-Ifes hasn't gone there to sit on his hands." Philip Craig, senior policy adviser at the CBI, sees the new role's importance as providing a centre for the existing PFI team: "It is sensible to have someone as a hub of expertise that officers can go to," he says.
Having secured funding, there is a realisation that we do need to put ourselves in a position to deliver
An even tougher task has fallen to Peter Coates. He was head of the Department of Health's private finance unit, but was promoted in October to the head of capacity planning. The move is part of a wider review being undertaken by DoH finance director Richard Douglas to restructure the department so as to ensure that the government's target of building 100 hospitals by 2010 is met. Coates says of the job: "My responsibilities will include co-ordinating the general building work in the NHS Plan, bringing the responsibilities of private and public hospital construction together."
Coates will also sponsor NHS Estates, the department's design agency. Sources at NHS Estates say the department was concerned that it was likely to miss the building targets set by the government and needed someone with expertise in PFI. Tim Stone, international chairman of PPP Advisory Services, says: "Despite the continuing dreadful quality of public debate, the industry at large is delighted with the focus being given by government to improving deal-making, of which Peter Coates' promotion is deserved recognition."
Coates has been criticised by some as being "basically an accountant", but one DoH insider gives an insight into the thinking behind the move: "There is certainly a drive for delivery in the background, and really this has to be done by reorganising the finance," he says. Coates will have to direct finance and other resources strategically so that the right funding and necessary skills are in place for each project.
Even the Office of the Deputy Prime Minister was revamped earlier this year. John Prescott appointed Prince's Foundation chief executive David Lunts as his director of urban policy. Lunts was charged with delivering the urban renaissance and recently helped set up the urban summit in Birmingham, which assessed the success of government policy over the past two years. This will have helped Prescott form his January statement on community policy.
And now the DoT is getting in on the act. Frustrated by the delays to the £16bn London Underground PPP, as well as public criticism of the procurement route being used for rail infrastructure, headhunters are looking for an "arbiter" who can negotiate deals quickly when they hit problems.
The trend of appointing these dealmakers is viewed by some as being part of the government's drive to make itself a better client. It is known that there have been numerous cross-departmental meetings on the issue. A DfES source says: "Having secured funding, there is a realisation that we do need to put ourselves in a position to deliver. There is a desire not to waste this opportunity."
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