Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Tories could scrap "flawed" PFI

The Conservative party could scrap the current private finance initiative model in favour of an alternative funding model if it wins the next election, according to media reports.

Shadow chancellor George Osborne told The Observer that the PFI model does not transfer enough risk to the private sector and lacks transparency.

He said: “The Government’s use of PFI has become totally discredited, so we need new ways to leverage private sector investment. Labour’s PFI model is flawed and must be replaced.

“We need a new system that doesn’t pretend that risks have been transferred to the private sector when they can’t be, and which genuinely transfers risks when they can be.”

Mr Osborne has supposedly instructed shadow chief secretary to the Treasury Philip Hammond to find new private sector funding models to build bridges and roads as well as schools, hospitals and government buildings.

He added: “The first step is transparent accounting, to remove the perverse incentives that result in PFI simply being used to keep liabilities off the balance sheet.”

According to the report Labour has signed more than 640 PFI contracts over the last 12 years leaving £206 billion burden on tax payers.