PFI/PPP is still a highly controversial area of government policy in Great Britain. During my recent visit (July 2001) it was the biggest public policy issue both in the media and in the House of Commons, where half the questions asked of the acting Prime Minister, Robin Cook, were on the subject – many of them hostile questions asked by government backbenchers.

The record of PFIs has at best been patchy.

Critic Dexter Whitfield,⁶ lists 25 reasons to oppose PFI/PPP.

They include:

• The potential development of a two-tier public/private system with the public sector becoming increasingly marginalised and residualised. There are worrying signs of this occurring already in NSW in the areas of healthcare, education and transport.
• Private sector borrowing costs are higher than the government’s, and many projects have ended up costing substantially more than originally estimated in the Outline Business Case. The actual saving on many projects has been miniscule – 2.8 per cent on the Dartford and Gravesham Hospital, for example, and 2 per cent on the first PFI school project, Colfax School in Dorset.
• There is an ongoing cost associated with PFIs which is often not accounted for. The cumulative impact of PFI/PPP revenue payments may force future governments to raise taxes, impose charges for services which are currently free, reduce borrowings to finance remaining public services or cut spending on non-PFI/PPP services. Certainly, after almost 10 years of PFI, Britain is a (very) high-cost country.
• The costs of going through the PFI/PPP tender process are very high, and this cost will ultimately be added to the overall cost of the project.
• The public sector comparator which is set up to provide a benchmark against which to assess the potential value for money offered by a PFI project is often flawed.
• While risk is ostensibly transferred from the public to the private sector in a PPP, ultimately the government as the regulator bears ultimate responsibility. This was clearly demonstrated in the Hatfield rail crash.
• Accountability is lessened, with the details of many projects kept secret because of ‘commercial confidentiality’.
• The public sector may lose control over assets and services. Even though many assets are supposed to be transferred to the State in 25 or 35 years time, the spread of PPPs may mean that by then the public sector no longer has the capacity or expertise to operate them.

Even the government-sponsored Commission on Public Private Partnerships concedes: “At the moment value-for-money is variable across sectors. PFI seems to be offering significant gains in roads and prisons but not in hospitals and schools.”⁷  

Even more tellingly, the CPPP describes the argument that the use of private finance allows government to undertake more projects than would otherwise be the case as “spurious”, declaring: “All PFI projects are publicly funded and incur future liabilities for the exchequer”⁸ , echoing the point made (above) by Whitfield. It says that PPPs are vital for the future of infrastructure and service provision in Britain, but that there must be a more consistent rationale for using them than the simple evasion of financial controls.

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