The hidden costs of PFI
FS Focus takes a look at whether PFI is the new Enron scandal.
Private finance initiatives (PFIs) have been described as many things in the past, a ‘fraud on the people’ a ‘doomed economic philosophy’ and a ‘great heist’ spring to mind to describe the controversial concept.
PFI projects, in rudimentary terms, involve private sector investment being used to deliver public sector infrastructure. The private sector project finance is underwritten by the public, and the asset is then leased back to the public under long-term arrangements, often for 25 years or more. This has resulted in some eye-watering costs to the taxpayer, examples including £320 for a plug socket at a school, £52,000 for a job in a hospital that cost the private contractor £750 and a total PFI bill to the taxpayer estimated at £229bn.
Continue reading
This content is not freely available. To access 'The hidden costs of PFI' you need to be one of the following:
-
ACA student
-
This content is available to ACA students. If you want to start the ACA qualification there are several routes you can take
-
Business and Finance Professional
-
An internationally recognised designation and professional status from the ICAEW.
-
Financial Services Faculty: Investment Management
-
Expert analysis, specialist support and trusted technical guidance for investment management professionals.