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Blair toughs it out against anti-PPP onslaught

PRIME MINISTER Tony Blair this week spearheaded the government's attempts to head off increasing trade union opposition to the use of private finance to fund schools, hospitals and infrastructure.

On Tuesday, Blair fought back against union-backed calls for a review of the private finance initiative (PFI) and moratorium on new projects.

He argued that PFI had kick started vital investment in neglected schools and hospitals.

'I am not going to go to parents and children in my constituency or any other and say 'I'm sorry, because there is an argument going on about PFI we're going to put these projects on hold, '' he told delegates.

'They don't care who builds them. I don't care who builds them - so long as they are on cost, on budget and helping to deliver a better NHS and state schools.'

Union-led calls for a review of PFI forced ministers to seek clearer ways to justify it in a series of speeches at this week's Labour Party Conference in Blackpool.

On Monday Treasury chief secretary Paul Boateng launched an unusually lengthy defence of PFI in a speech to the conference.

But he was heckled and slow handclapped by delegates who then voted against the government and in favour of a conference motion demanding a review of the PFI.

The motion also demanded an investigation into alternatives to private finance.

Trade unions Amicus, Ucatt and Unison earlier led calls for a review of the PFI, claiming that projects were too expensive and threatened the jobs and working conditions of public sector workers.

Unision general secretary Dave Prentis urged members to back calls for a PFI review, claiming that projects allowed the private sector to make profit margins of between 20% and 30%.

Boateng said that the private sector had always been involved in building schools and hospitals, but under conventional procurement the public sector paid for cost over runs and delays.

'PPP requires the private sector to bear the full responsibility for delays and overruns and to deliver on improved services across the lifetime of an asset and not just walk away from it at the conclusion of construction.

'This has real and positive advantages, not least in complex long term projects where the requirements of ongoing maintenance are as big as the construction project itself, ' he said.

He pointed out that public spending watchdog the National Audit Office regularly reviewed PFI projects.

Civil engineer and Labour MP Laurie Quinn said that PFI could also help iron out the peaks and troughs of demand for construction services which had put pressure on contractors in the past.

He said that PFI's ability to iron out troughs in demand meant people would be less likely to drift away from construction into other professions.

This in turn would help deal with skills shortages, he said.

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