Changes to PFI rules will damage confidence - BSA
04 November 2008
The Treasury plans to reduce profits on refinancing PFI deals are criticised by the BSA as doing nothing to help the Government's agenda of investment in public service delivery.
The new Treasury rules mean that future private sector investors will receive only 30% of any profit on refinancing while the public sector takes 70%. Currently any gains are spit 50-50.
Commenting on the new rules the Treasury has introduced on the balance of profit sharing for PFI deals BSA Chief Executive Mark Fox said: “These new rules substantially reduce the attractiveness of being involved with PFI deals and they come at a time of serious economic challenge and testing of confidence. The public sector needs the investment, innovation and entrepreneurial dynamism of the private sector if it is to successfully deliver the Government’s agenda of investment in public service delivery. The new rules will do little to help that agenda.”
The BSA is the trade body that represents companies, and their advisors, delivering outsourced and business services across the private and public sectors. BSA Full Members have a combined worldwide turnover of c.£67 billion and employ around one and a half million people. In the UK the combined turnover is c.£14 billion and c.340,000 people are employed across the country.