In its annual budget submission to chancellor Gordon Brown, the confederation said the PFI had failed to deliver a steady flow of construction projects and called on the chancellor to address the issue in his budget.
Confederation public affairs director Stephen Ratcliffe said: "Members are pessimistic about what will happen beyond the millennium. The industry could be in for a difficult time over the next year and the government could make it a soft landing." The confederation said the failure of the government to introduce standard contracts for PFI schemes, as recommended in Sir Malcolm Bates' initial review of PFI in 1997, was preventing many firms from getting involved in schemes.
Ratcliffe said: "PFI needs a lot to make it better, Bates' recommendations are not happening, while many smaller firms aren't getting a look-in on PFI schemes because of the government's tendency for bundling smaller projects." The confederation added that the expected release of capital receipts has failed to live up to the expectations of the industry, and called on the chancellor to reduce the VAT rate on domestic and repair work to 5% as part of its campaign to outlaw cowboy builders. Confederation tax specialist Liz Bridge said this would "totally eliminate the cowboys' competitive advantage over reputable firms, combined with other measures, such as the proposed kitemarking for builders".