After Carillion and Capita, is PFI itself on the critical list?

Association of Salaried Medical Specialists's picture
Printer-friendly versionPrinter-friendly version

7 February 2018

Philip Inman - The Guardian

Long before the collapse last month of Carillion, one of the government’s go-to outsourcing and building groups, the signs of strain inside Whitehall over the future of financing public projects with private cash were clear. Since 2010 the government has signed 80 contracts under the private finance initiative (PFI). In the 13 years before 2010 it signed 620.

The figures are a measure of Tony Blair and Gordon Brown’s enthusiasm for shaking up the way public sector bodies financed the building of schools, hospitals and prisons, and the reluctance of the coalition government to keep the programme on anything more than life support.

In 2012, the then chancellor, George Osborne, backed a review of the controversial scheme, and in 2016, Osborne’s Tory successor Philip Hammond concluded there was still plenty of mileage in it. He relaunched it as you might a Hollywood film, calling it PF2.

 

Except that PFI was by then a much-discredited formula. It might have raised £60bn over the years for building schools and hospitals, but the contracts were infamous for allowing businesses such as Carillion, which managed hundreds of public-sector projects as well as vital public services, to make excessive profits. It was a flop.

Copy this html code to your website/blog to embed this press release.

Comments

Post new comment

4 + 13 =

To prevent automated spam submissions leave this field empty.