Socialist Worker

The dodgy accounts of PFI

Issue No. 1786

Tony Blair is relying on disgraced accountants Arthur Andersen and similar companies to push through privatisation schemes. Andersen did auditing and consultancy work for Enron, the bankrupt energy giant. It shredded documents showing how Enron hid its losses to appear to be making a profit.

Arthur Andersen wrote a report in January 2000 praising PFI and claming it led to 17 percent savings. It went on to be involved in £10 billion of PFI deals. As former Labour deputy prime minister Roy Hattersley points out, 'Arthur Andersen's timing was impeccable. 'The PFI report was published at the moment when the government wanted both to hold down public expenditure and demonstrate its faith in private enterprise.' The Andersen report is virtually the only one to claim PFI is efficient. Then last week Blair, under pressure over links to Andersen, referred in parliament to a report by PricewaterhouseCoopers, another of the 'big five' auditing multinationals.

But PricewaterhouseCoopers has also benefited from the PFI scam. It is part of PFI deals worth £18 billion. It is also the administrator of the European arm of Enron, and did some valuation work on two of the 'partnerships' set up by Enron executives to hide its losses.

London Underground management and Stephen Byers were set to give the go-ahead for privatisation of the tube this week, citing a report claiming it would be cheaper than public investment. The report was compiled by PricewaterhouseCoopers.

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Sat 9 Feb 2002, 00:00 GMT
Issue No. 1786
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