Schools boss calls for 'public debate on PFI'

Partnerships for Schools (PfS) chief executive Tim Byles called into question some aspects of PFI financing – including the way risk is allocated – in a speech in London today.

Speaking at the PfS design conference, Byles said certain risks should stay with the public sector.

"The time is ripe for a public debate on PFI – and I mean this in the generic sense, not limited to BSF [Building Schools for the Future]," Byles said. "What is clear however is that there are very real questions about risk transfer and when is a risk really a risk?

"In the parlance – this is all about genuine risk transfer – when should a risk be transferred (and priced accordingly) and when should it not be."

He added that councils are better off managing certain risks, such as planning, which are currently priced into contracts. "In short, why pay for something when you don’t need to?" he said.

Byles also questioned the way that risk is allocated throughout a project’s life. He suggested that there is an imbalance in the way risk is profiled because it fails to reflect that the highest risk is during the first phases of a project.

"The question here is whether it makes sense to have shorter contracts attracting investors with a higher risk appetite during this early phase, with a view to refinancing post the initial period."

He also confirmed that councils will no longer get funding for design advisors from Cabe, instead they have to hire a ‘client design advisor’, as reported by the PPP Bulletin earlier this month.

PfS is working with Riba and Cabe on a list of client design advisors for councils to choose from, which will be released next year.