21/07/2010

DEFENCE TRAINING PFI No retreat

Article Private Eye July 2010 

DEFENCE TRAINING PFI
No retreat
NOW that the government has slashed one PFI programme - building schools - by ditching scores of unsigned contracts, will it rethink the biggest single PFI deal on which it has yet to put pen to paper: the long-delayed £13.5bn contract to hand defence training to a consortium led by struggling defence firm QinetiQ?
As with the axed schools deals, millions of pounds have already been paid to consultants for preparatory work; but this pales next to the billions that could be saved from future defence budgets if defence secretary Liam Fox doesn't sign. As the Eye reported two years ago (Eye 1218), the deal that would centralize all forces' training at a new £840m defence academy at St Athan, South Wales, was supposed to save the Ministry of Defence £400m over 30 years. That was before the price increased by five times as much, £2bn, with latest figures suggesting yet another £0.5bn rise.
Earlier this year a Welsh planning inquiry revealed that in the age of austerity the number of trainees going through the proposed academy would not be the 6,000 anticipated when the deal was planned and the savings predicted, but 55 percent fewer at 2,700 - hardly enough to justify building a new academy. It now seems undeniable the deal will cost a lot more than improving, or just maintaining, longstanding and in some cases historic facilities
that the military remains pretty happy with. But the coalition seems reluctant to cut the deal. At defence questions this month, Lib Dem armed forces minister Nick Harvey, who is known to have had
his ear bent by QinetiQ, even defended it: "To change course now", he told Tory backbench opponent of the deal Mark Pritchard, "would undo a great deal of investment that has already been made and add considerably to the final cost".
Just two years ago in opposition, Harvey was an outspoken critic of an earlier botched defence training PFI deal. When the National Audit Office found that a contract to train armoured vehicle
drivers had been scrapped after six years of confusion over "transfer of course pass rate risk"
(and £15m down the plughole), Harvey complained: "PFI projects should only be used where they can be clearly proved to provide the best value for money. Instead, the MoD appears to be signing up to PFI schemes without thinking, then throwing away millions abandoning them years later."
Oddly enough this is what he now proposes to do on a massive scale.
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Actually its now £14bn 
 The largest PFI in history whose costs have risen to £14bn for just package 2 as Nick Harvey said in a written answer 7th July 2010 
When first announced, the FULL training package was announced as £14 billion.Then Package 2 was cut out and it shrunk to £11 billion. 
In 2008, the MOD agreed to shrink the trainee contact hours by 25%, but still the cost crept up to £12 billion. 
Late in 2009, the sum of £13 billion was mentioned and used at the January 2010 Public Inquiry. 
Now on their website (www.metrix.uk.com), we see £13.5 billion over 30 years. Now Nick Harvey says £14bn! Remember Liberal Democrat then shadow Defence Secretary Nick Harvey was even more outraged about MoD PFI projects, accusing the MoD of wasting millions of pounds. He said "This report shows that the Governments blind faith in PFI projects is leading to millions of pounds being lost in inefficiencies. 
"PFI projects should only be used where they can be clearly proved to provide the best value for money. 
Millions wasted in defence PFI deals 
http://www.publicservice.co.uk/news_story.asp?id=7543 
Friday, October 31, 2008 
 
In 2008, there was only a few £100 million between the Metrix deal and the public sector comparator. £2.5 billion later, what is now the difference? 
 
No surprise that the MOD officials are telling the Minister not to bother with a proper review of alternatives 
more info here 
http://www.antimetrix.org/ 
 
JONATHAN RUTHERFORD ARTICLE 
Is that all, Mr Pocklington? 
 
The government has committed nearly £160bn on the never-never with PFI projects. How can they possibly deliver value for money?... 
The largest PFI scheme in UK history is a military university which will be built at St Athan in Wales. It will be run by Metrix consortium which includes QinetiQ, Land Securities Trillium, Sodexho, Italian owned arms manufacturer AgustaWestland and US military giant Raytheon. How much is it going to cost? There is no straightforward answer. According to press reports the project is worth £10bn. But Metrix claim the overall value is £16bn. 
A second phase of the scheme has run into "affordability challenges".http://www.guardian.co.uk/commentisfree/2008/mar/28/isthatall 
mrpocklington 
 
[It would be interesting to see Jonathan Rutherford doing a follow up article as he was proved right about escalating costs (see below march 2008--- 
soundings magazine dicussions 
http://www.facebook.com/topic.php?topic=15848&uid=32150551470#!/topic.php?uid=32150551470&topic=15848 

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