Daft Old Duffer returns. Guest opinion articles do not necessarily reflect the views of the publication. Ed
Let me propose a little scenario for you. One you’ll find not too unfamiliar I think.
You have just accepted a quote from your friendly local builder to build an extension to your home. And he has requested a third of the bill paid up front so that he can buy the required equipment and materials.
You’re not too happy about that, but he assures you it is normal practice, that he has a good reputation and you can accept his word he’ll be starting immediately.
You want the job finished before the winter and he seems a decent bloke with all the signs of a reputable and well established business – which is why you selected him in the first place – so you agree and write out the cheque.
Work starts
And sure enough, within a couple of days one of his lorries arrives and disgorges some scaffold poles, a heap of ballast and a one-man digger complete with driver. The garden is cleared, the foundations of the extension marked out and the trenching begun.
At the end of the first day the workmen depart with good progress having been made.
And that’s the last time you see any of them.
I told you it would be a familiar scenario.
Normal business practice?
After a couple of weeks of irate telephone calls and broken promises you discover the elusive builder and his gang are working on another site, and you accuse him of working a fiddle.
Not so, he patiently explains. He is doing no more than follow normal business practice. Which is to borrow money at the lowest rate possible – in this case from you at no interest whatsoever – and then employ it to gain the maximum return.
Which happens to be job number two, which offers a larger profit and/or more work to follow in the future. As against your one-off extension which he quoted at a minimum price because he knew you couldn’t run to anything more.
And he’ll be sure to return to you as soon as convenient.
Waiting on the builder’s pleasure
So what do you do? Sack him and bring in another builder – and risk going through the whole process again, with the prospect of greeting the winter without a proper roof and a tarpaulin where one of your walls should be?
As well as fighting to get your original deposit returned?
Or do you resign yourself to simply waiting on the builder’s pleasure?
Highways PFI
In the spring of this year the PFI contract is scheduled to begin. With the Contractor already holding seven point three million pounds of our money. I have no doubt they, and the sub-contractors they will presumably employ, are honest businessmen who fully intend to carry out and complete their contractual obligations on time, on budget and to a good standard.
It must be borne in mind however that their principal duty is towards their shareholders and other dependants. Just like the jobbing builder outlined in the example above.
Rise in inflation
Let us imagine for example that sometime during the next 25 years the value of the pound sterling falls to the point where it is hardly worth the paper it is printed on. (You may think such a scenario unlikely. I don’t).
The instinctive reaction of all the contractors involved will be to safeguard the interests of their shareholders. Indeed, they would be verging on the criminal if they did anything else. They will dismiss all their employees, halt all work, attempt to sell of the more valuable of their equipment and generally hunker down until the storm has passed.
What they will not do is say to one another, “never mind our problems we owe it to the good folk of the Isle Of Wight to carry on regardless.”
Dotted the i’s and crossed the t’s
For this reason it is quite normal with any contract as binding, as long lasting, and as expensive as our PFI for the minnow side – which is us – to appoint a consultant to safeguard our interests. Such a consultant will charge a quite enormous fee. But he or she will in the long run save us money.
Let us hope this is happening in this case. For the alternative is to rely on whichever Councillor is delegated to look after our interests. A Councillor who no doubt considers himself a man of sound commercial, financial, and industrial experience, based on his previous ownership of a couple of shops or a small hotel.
And who will in fact be a midget in Giant land.
Maybe as well if we all keep our fingers crossed.
Image: Cinnamon Girl under CC BY 2.0
