PFI is a piece of smoke-and-mirrors finance - and now we're allowed to say so
The doublethink of the Private Finance Initiative project is unraveling – finally
As local authorities begin to contemplate council housing again critics of the Private Finance Initiative (PFI) are coming out of the woodwork, emboldened and showing the buy-now-pay-later procurement method to be the fraud it is.
Commentators now criticise PFI on moral grounds, questioning the very foundations of the scheme, comparing it to the complex financial instruments behind the credit crunch. They point out that the recession means that to keep the scheme going, the government will now borrow money (which taxpayers must pay back) to fund banks (some now owned by taxpayers), who will in turn lend that money to PFI consortia who will charge the taxpayer a premium to buy back the buildings over 30 years.
PFI supporters are hard to find. The Observer printed a comment piece on Sunday (1 February) from one beneficiary, whose only ground for advocating PFI was that it produces quality buildings. With honourable exceptions, this is utter tripe.
Someone needs to come up with a compelling reason for PFI to continue as the preferred method of procurement for public projects. It’s not fast or efficient, it doesn’t guarantee quality, it limits architectural diversity and most of all it no longer protects taxpayers from financial risk. Is there anyone out there who still thinks PFI is a good idea?