New: Peter Mandelson’s lobbying firm behind think tank pushing PFI 2.0
Plus: new report lays bare UK government’s woeful conflicts of interest management
Peter Mandelson. Source: House of Lords
By Adam Bychawski and Peter Geoghegan
Peter Mandelson has been busy. Whether it’s running for Oxford University's next chancellor or pitching to become the UK’s ambassador to Donald Trump’s United States, the longtime New Labour éminence grise rarely seems to be out of the headlines at the moment.
Mandelson’s activity has also drawn the attention of regulators. The lobbying watchdog is currently investigating his ‘advisory’ firm Global Counsel following revelations in this newsletter about its undeclared lobbying for a Qatari state freeport business.
Now Democracy for Sale has discovered that senior staff at Mandelson’s lobbying firm are behind an industry-funded think tank that is urging Labour ministers to adopt controversial private finance deals.
Two senior staff at Global Counsel have leading roles at the Future Governance Forum, a Labour-aligned think tank that has called for Keir Starmer to adopt a new form of private finance initiatives (PFI) to build new schools and hospitals.
Treasury civil servants have been considering the Future Governance Forum’s PFI proposals, according to a report in the Times in September.
PFI was championed by New Labour to finance new hospitals, schools, and prisons, but abandoned in 2018 after being deemed poor value for money by the public spending watchdog.
Mandelson, who served as minister under both Tony Blair and Gordon Brown, co-founded Global Counsel after leaving office. Last year, he called on Starmer to consider reintroducing PFI.
Former shadow chancellor John McDonnell, who has been suspended from the parliamentary Labour Party, told this newsletter: “In the late 1990s it was corporate lobbyists who sold PFIs as the solution to New Labour’s financing challenge. They proved to be a hugely costly failure.
“It’s hard to believe that Labour policymakers are taking us round the same track as the lobbyists of the corporate vultures sell the PFI snake oil once again.”
The Future Governance Forum was set up in 2022 “to provide the intellectual and practical infrastructure vital to national renewal and the revival of progressive government in the UK.”
The forum’s funders include BT, which was previously forced to pay compensation to the Ministry of Defence after fiddling targets in a £3 billion PFI deal, and the Lloyds Bank Foundation, which is funded by profits from the bank that has had interests in over 200 PFI schemes.
The Future Governance Forum’s ties to Global Counsel run deep. The think tank’s deputy director, Adam Terry, is a senior advisor at Global Counsel having previously ran the lobbying firm’s financial services practice for several years.
Terry, a former Labour party policy advisor, currently “supports clients to develop and implement effective strategies for influencing and navigating the UK political and regulatory environment, focusing on the UK Labour Party,” according to his Global Counsel profile page.
The Future Governance Forum’s PFI proposals were laid out in a September report authored by the think tank’s policy director Matt Bevington - who also leads Global Counsel’s regulatory and political due diligence team.
The PFI report also included input from Mark Loughridge, then associate director for healthcare at Global Counsel, and two figures at the consultancy firms PwC and KPMG that are responsible for public sector infrastructure.
Global Counsel does not publish a full list of its clients but is currently working for Shell, the Premier League, mining giant Anglo American and Trump-backer Peter Thiel’s controversial tech firm Palantir, amongst others.
Global Counsel’s clients include Palantir, founded by Trump donor Peter Thiel.
Transparency campaigners have raised concerns about potential conflicts of interest from staff working for both a lobbying firm and a think tank close to government.
"Think tanks, by their very nature, will attempt to shape government policy, however, when the line is blurred between think tanks and consultant lobbyists legitimate questions are raised as to in whose interest such policy recommendations are made,” said Rose Whiffen, senior research officer at Transparency International UK.
“Policy makers should be cognisant of who is behind these influencing organisations and what vested interests they may present.”
The PFI report also says that it “would not have been possible without input from” Lord John Hutton. A former New Labour minister, Hutton chairs a lobby group for PFI investors and recently warned of the danger of “serious disruption” from hundreds of PFI-funded projects due to expire during the life of this parliament.
At an event to promote the launch of September’s Future Governance Forum report, Hutton claimed that “we've had some good contact with ministers” regarding current PFI contracts.
Global Counsel’s Bevington, who also spoke at the event, appeared to suggest that the aim of the Future Governance Forun’s proposals was smoothing ministers’ anxieties over reintroducing PFI.
“Part of what we try to do is provide some ways in which policymakers can be reassured that these are kind of responsible things, responsible projects to pursue, fiscally sustainable, and also value for money,” he said.
Johnbosco Nwogbo, lead campaigner at We Own It, told Democracy for Sale that “PFI has failed our public services. Some NHS hospitals pay £1 out of every £6 in their budget to service their PFI debts. Our public services are still reeling from the historical catastrophe that PFI has been. It is no surprise that PFI is so deeply unpopular with the public.
“The only kind of organisation that would support its reintroduction is one funded by the financial institutions that benefit from the destruction of public services.”
A Future Governance Forum spokesperson said: “All of our research is independent and evidence-led, upheld by clear boundaries that ensure the integrity of our work. We publicly and voluntarily disclose all funding sources on our website."
Global Counsel and Lord Hutton did not respond to requests for comment.
On Friday, the National Audit Office published a new report into how conflicts of interest are managed in the UK government. And guess what? The situation is bad, really bad.
Despite scandals such as the Covid ‘VIP’ lane and Grenfell Tower, less than a fifth of public bodies do the full recommended scrutiny of declarations by senior officials. Just one public body imposed any sanctions in the last year for breaches of conflict of interest rules.
This isn’t a surprise to Democracy for Sale. Earlier this year, Building Digital UK was forced to publish a register of interests after we revealed that its then chair - Tory donor and ex-Fujitsu top brass Simon Blagden - had failed to declare any interests.
The woeful state of conflicts of interest management only increases the likelihood of cronyism and corruption in public life. As Spotlight on Corruption’s Sue Hawley point out in this excellent blog, it’s a scandal waiting to happen. So when will the government take action?