The private finance initiative built hospitals and schools that would otherwise have waited a generation. Its deciding attraction was never the buildings - it was which column the debt landed in.
Crossbencher · 21 July 2026
The case for the private finance initiative was serious, and it was made by serious people across two parties.
Public bodies are poor clients. A department that owns its own building has every incentive to defer maintenance, because the roof it doesn't fix this year is next year's problem and this year's saving. Private capital, tied into a contract that made one company responsible for building an asset and then running it for twenty-five or thirty years, was meant to break that habit. A firm that has to keep the boiler working for three decades has a reason to install a good boiler. Risk moved off the public balance sheet: if the project ran late or over budget, the contractor wore it, not the taxpayer. And the money was there when the Treasury's wasn't. A hospital could be built now and paid for across its working life, the way a household buys a house rather than saving until it can pay cash. For a country with Victorian infrastructure and a constrained budget, that wasn't a swindle. It was, for a while, plausibly the responsible thing to do.
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