THE GOVERNMENT will today announce plans to reform the Private Finance Initiative (PFI), a highly controversial method of funding the construction of schools and hospitals.
Last night, a Treasury source said: “This will effectively mean the end of PFI as we know it.”
Treasury sources say the chancellor wants to find a new way of tapping private sector expertise and funding that doesn’t cost the taxpayer so much.
Gordon Brown signed off hundreds of public construction projects using PFI, which allows the government to keep the liabilities associated with the buildings off of its books.
But the method is incredibly costly: more than 900 schemes have been completed with a total capital value of £56bn – yet the amount the taxpayer currently has to repay is £229bn and rising.