Thursday, 22 January 2009

More misleading ministers

It is now clear that ministers have repeatedly misled MPs over the escalating costs of their biggest ever private finance initiative (PFI) project.

Under the defence training review (DTR) ministers plan to give the Metrix consortium a 30-year contract to build and run a specialist military academy in Wales. But increased borrowing costs and falls in the value of surplus MoD land have pushed the project’s price tag to £12bn. Many doubt the scheme's viability.

The National Audit Office recently disclosed that this “significant cost growth” led the Ministry of Defence to deem the project unaffordable last May. In spite of this, hapless Armed forces minister Bob Ainsworth has repeatedly claimed that it provides savings to the taxpayer.

Last April, a week after he was told of a £1bn increase in costs, Mr Ainsworth stated in a written parliamentary answer that the project provided savings of approximately £400 million over 30 years.

On 3 November, Ainsworth told MPs that “the programme is still affordable and remains more affordable than the in-house alternative”. But the MoD subsequently disclosed under the freedom of information act that the cost of the programme remained at £12bn. It has also emerged that the MoD has developed a new in-house “fallback” proposal, which it has deemed both “affordable and deliverable”.

Tory MP Mark Pritchard is a vocal opponent of the privatisation, which is interesting in itself. His constituency of the Wrekin includes RAF Cosford, which would close under the PFI. He says: “the project’s figures no longer add up - and neither do the minister’s words. There needs to be an early and updated statement in the House to clear up a long list of ministerial contradictions.”

In a letter to Pritchard, Ainsworth has asserted that his statement that the project was affordable was correct “at the time… following negotiations with Metrix to drive down costs and a rigorous and detailed assessment of the project’s affordability issues”.

Ainsworth declined to stand by his claim that the PFI option was “more affordable than the in-house alternative”. Ironically, he stated that detailed information on the costs of the in-house option “underpins our negotiating position with Metrix, and its disclosure would hinder the MoD’s ability to achieve value-for-money”.

Pritchard has accused Ainsworth of compromising his own department's negotiating position and prejudicing its ongoing evaluation. He claims that the government’s current financial difficulties mean the Treasury cannot ignore the rising costs of the project. "It is no longer tenable for ministers to write off the fallback in-house option." he says.

An MoD spokesperson told me: “The bottom line is that [the project] is affordable. The MOD and Metrix have over the last few months and continue to work constructively together to drive down costs without materially affecting the scope of the project. You can’t solely focus on the cost, affordability also incorporates the fact that [the project] is now the best value for money for the taxpayer.” But she refused to deny that the MoD has increased its funding for the project to ease its affordability issues.

Under the PFI, staff from Cosford and other MoD bases would have the option of transferring to St Athan in the Vale of Glamorgan as employees of the Metrix consortium, which includes arms companies Qinetic and Raytheon, as well as training bodies City and Guilds and the Open University.

The Public and Commercial Services (PCS) Union opposes the PFI. Regional spokesperson Robert O'Harney, says: “Should the PFI go ahead, it will see our members being privatised and then 4 years later being given the choice of moving themselves and families to Wales or being made redundant. Additionally the vast ex-military experience of many of our members will be lost forever.”

1 comment:

Theoretician said...

Why have the media ignored this massive pfi to date?

Questions from the anti-metrix campaign in Wales for Welsh Assembly members Jan 2009

1. Are you happy for this massive PFI to be imposed on Wales?

2. When is there going to be a debate in the Assembly about the St Athan project ?

3. Is the DTR on the brink of collapse?

4. What amount and from which sources is taxpayer’s money involved? How much of this is coming from Wales?

5. Are Members satisfied that if this project falls apart, the Assembly’s budget will not be adversely affected?

6. Have the Welsh Assembly Government been briefed on the latest funding situation since and the withdrawal of LST?

7. Will Metrix make up cash shortfall by training private armies, regardless of their human rights record, and is there anything to stop them doing that?

8. Why are present highly qualified training staff quitting?

9. Why has the St Athan consultation website not been updated and why is still no feed back from the consultations that have already taken place as long ago as July 2008.(

10. Visitors to the DTA exhibition complained of a “lack of detailed information”. Have the issues raised there been addressed? Will the academy be an “isolated, gated village“? Would nearby towns see an increase in “squaddie rowdiness and drop outs from the academy”?

11. In related news ‘Wales on Line’ reports - £100m plus plan that is being considered, to build a new road to Cardiff International Airport: It has been suggested that the road would be to serve the St Athan training academy. Would it not be an outrage to spend such huge amounts of Welsh public money on feather-bedding the training academy project?

12. Why should Welsh taxpayers subsidise private organisations?