links for 2011-08-22

  • NOTE: PFI=P3

    Private finance has always been more expensive than government borrowing, but since the financial crisis the difference between the costs has widened significantly…The difference in finance costs means that PFI projects are significantly more expensive to fund over the life of a project. This represents a significant cost to taxpayers.

    We have not seen clear evidence of savings and benefits in other areas of PFI projects which are sufficient to offset this significantly higher cost of finance. Evidence we studied suggests that the out-turn costs of construction and service provision are broadly similar between PFI and traditional procured projects, although in some areas PFI seems to perform more poorly…

    …For reasons discussed in this Report the Government should be looking to use PFI as sparingly as possible until the VfM (Value for Money) and absolute cost problems associated with PFI at present have been addressed.

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