Do you remember how PFI was meant to work?

David Miliband, House of Commons, debate on PFI in the education sector, 2004:

The public-private partnerships enable the public sector to use private sector resources to deliver elements of services that the latter, through its skills and expertise, is best placed to provide through a structure in which the private sector puts its capital at risk so that it is paid only when it delivers.

That’s of course how PFI was always sold to us by Labour (and in its previous forms by the Conservatives before that*). And now that the private sector is struggling to deliver PFI schemes for schools, are those firms saying, “Oh, fair enough, it was always part of the deal that we took some risk in return for the opportunity to earn big profits?” or “Hey, give us more money! Please! Now!”? I think you can guess.

* A note for younger readers: yes indeed, back in the past the Conservatives were in power.

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3 Comments

  • David Heigham 16th Feb '09 - 1:15pm

    Some PFI contracts have delivered.

    Many were and are expensive for the taxpayer – the governemnet paid too much of our money for the contractors to take on too little of the risk.

    Now it appears that a good many contractors signed up to deliver withoput putting the finance in place to do so. In my mind they are not even in the long queue for government bailouts. They took a stupid risk and deserveto lose.

  • Liberal Neil 16th Feb '09 - 1:21pm

    This situation was entirely predicatble, which is probably how so many people were able to predict it.

    What the Government should do, of course, is offer to take the properties, fully built, half built or otherwise, and fund/build them themselves and them hand them over to local authorities, as they should have done in the first place.

  • Duncan Borrowman 17th Feb '09 - 9:20am

    One of my favourite bits of parliamentary hypocrisy starts at http://www.publications.parliament.uk/pa/cm199596/cmhansrd/vo960312/debtext/60312-29.htm where Orpington MP, and then health minister, John Horam sings the praises of PFI. Of course the Tories pushed through the PFI hospital in his constituency, which he has done a complete U-turn on. Meanwhile on the other side Harriet Harman was opposed to PFI.

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