Chamber and committees

There was an announcement recently about Falkirk schools, presumably by Falkirk Council. Is that a proposal to bring them in house earlier than the expiry date of the PFI?

Again, I am struggling to understand under what circumstances the public sector would walk away from a lease. If you have a hospital that is 25 years old, you will not abandon it, presumably. I suppose that there may be circumstances where you might do that, but it is highly unlikely, is it not? In comparative terms, it will still be a relatively new piece of infrastructure that is running as part of the health service. I am struggling to understand why, under those circumstances, walking away would be considered an option and, therefore, why there is this exit fee premium to be paid.

Could I pick up on Mr Jobson’s answers? You have existing staff who were employed by Serco on certain terms and conditions of employment, and you have recruited new people to work at the prison who are on different terms and conditions of employment, specifically with fewer hours, more breaks and more annual leave. Presumably, that could be a cause of some conflict if existing long-serving staff see that people that they are working alongside are getting much better leave and break arrangements. How are you managing that operationally? If I am on a shorter working week than somebody else, how do you manage that? Also, how are you managing the potential for conflict between one group of workers and another?

It would be useful for the committee if you could give us the comparison of the overall cost under the old model and the overall running cost under the new model, so that we can get an understanding about whether a transfer from a PFI-style contract into an in-house arrangement costs more or is about even. It may vary from situation to situation. Mr Rennick also has responsibility for schools, for example, so it may be that these issues are not so acute in other parts of the public sector where PFI transitions are likely to take place.

I also have one other issue to raise with you. For the record, Teresa Medhurst, are you saying that, on 1 December, there will be a big bang and that is when everybody in HMP Kilmarnock will move over to the SPS’ terms and conditions, or is there a period leading up to 1 December in which different cohorts will transfer to the new terms and conditions under the new contract?

We have the chief executive of NHS Scotland coming before the committee before we break for summer recess, so we could consider the issue then.

My parting question is around lessons learned. Teresa Medhurst, I know that you and your colleagues are still in the middle of the transition but, even at this early stage, do you think that there are things that you might have done differently? Lorraine Roughan, when you go to Kerry Alexander’s collaborative workshops and share your experience, what are the dos and don’ts that you would take to that kind of get together?

That is very insightful. Does anyone else want to come in with lessons learned, or things that we can do in relation to future examples of PFI expiries?

We are in the middle of a general election campaign, Mr Reekie, so who knows what the future might hold.

I thank our witnesses this morning for their input. It has been very useful to us and the committee will have a continuing interest in this area, so I thank you for giving us some of those introductory lessons. We may go on to future phases of analysis and audit in the area, and I am sure that the Auditor General will be taking some notes from this morning’s session, too.

I now move the meeting into private session.

My final question is for Mr Rennick. Looking at the scale of all this, I think that the total value of these contracts is £9 billion and that around half of that is in schools, is it not, which is your responsibility?

Do you have any sense of when demand will be greatest on the capacity of that part of the public sector that you have oversight of?

That is helpful. I am conscious of the fact that, the last time he was here, Mr Reekie told us that there are only three people in the team looking at PFIs, so I recognise that there might be some capacity issues. However, if you could supply us with that information, that would be helpful.

In a similar vein, is retendering an option in any of these cases? That is probably more a question for Mr Rennick. Do you look at a range of options in the lead-up to the expiry of one of those PFI contracts? We rehearsed the issue a little bit in relation to the Serco contract at Kilmarnock, but in more general terms, wearing your value-for-money hat, is that a consideration?