The new Royal Liverpool University hospital being built in 2014. The PFI contractor went bust. The hospital opened partially, in 2020, and fully in 2022. Photo Rept0n1x via Flickr (CC BY-SA 2.0).
The government is grappling with how to revive Britain’s infrastructure. It seeks private investment funding to do so, seemingly oblivious to the damaging legacy of the Private Finance Initiative (PFI).
The Chancellor, Rachel Reeves, is looking back to the ideas of the Blair/Brown Labour administration. They took a Conservative policy, that private companies could be contracted to build and run public service projects, and hugely expanded its use.
PFI was controversial from the start. But it became the only game in town to fund public buildings. Its damaging financial legacy lives on with public money still pouring out. And many of the long-term contracts coming to an end are mired in expensive litigation.
As long ago as 2017, the National Audit Office found, to no one’s surprise, that there was no evidence that these schemes are value for money. That should have been the end of PFI, but existing schemes carried on, with no call by politicians to stop them.
Now 40 Labour MPs have written to Reeves to ask that no new PFI schemes be introduced. A timid step, given the wealth of evidence justifying the opposition of unions in the NHS and elsewhere from the outset.
• A longer version of this article is on the web at www.cpbml.org.uk