risks they run. They price the likely inflation of labour and materials as generously as possible. In some cases, the paper reveals, financial �adjustments� are simply �slipped in� to the huge and complicated spreadsheets used to calculate how much the government owes. �Without decent public sector advisers�, the insider writes, the opportunities for this kind of practice are �enormous�. �

The price of the project can rise, in some cases, by two or three times between the selection of the preferred bidder and the signing of the final PFI contract. But this is the inevitable result of a complete absence of competition during the key stage of negotiation.

�Now all this is rather odd. The government has repeatedly assured us that it is introducing �private sector disciplines� into public life, that competition makes private provision more efficient than public funding. Yet our new public services are being provided by a system which allows for no competition and no financial discipline, just when they are needed most.

�Reading the construction press, it's not hard to see why this is allowed to happen. If the consortia bidding for a project had to supply a detailed bid for the final contract before they were chosen, rather than just an outline bid for some broad specifications, they would have to spend, for some of the larger schemes, around �5 million preparing their offer. If three consortia bid for the same contract, they would each face a two-in-three chance of losing their money. But if the winning consortium needs negotiate the contract only after it has been selected, it can develop its bid at public expense, with no fear of loss. If the process were reformed, the big companies have warned, PFI would come to an end.

�What this means is that the private finance initiative can be implemented only with the help of an anti-competitive process which leads inexorably to corruption. If it were cleaned up so that it offered fair competition and value for public money, the big corporations would desert it. Public services would, once more, be controlled by the public.

�Two years ago, the European Union realised what was happening in Britain and the other European countries experimenting with PFI. In May 2000 the commission published a draft �consolidated procurement directive�, which would ban the selection of preferred bidders before a contract has been developed. Since then, the British government has been campaigning to continue defrauding the British taxpayer and sustaining this very British form of corruption. With the help of the corporations profiting from PFI, it has been pressing for an amendment which would allow preferred bidders to continue to be selected. The directive has now been laid before the European Parliament, and has reached a critical stage of negotiation.

�I know it won't be easy to get people onto the streets to defend a European directive no one has ever heard of. But this obscure piece of legislation offers us the best hope we will ever possess of defending our public services from bankruptcy and collapse. "Down with the government's amendment to the consolidated procurement directive" isn't exactly a catchy slogan, but this is the sort of complexity with which we must now engage if we're serious about political change.

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