PFI has been a nice little earner for those companies who’ve been able to take advantage of it. The theory is that it’s some sort of partnership between the public and the private sector; the reality is that one part of that ‘partnership’ has benefited, whilst the other has lost out.
Those cash-strapped public bodies who found themselves pushed into using the approach have found that they have got shiny new hospitals and schools which they could not otherwise have afforded, but are faced with huge ongoing annual costs about which they can do little. And that, in turn, has constrained their ability for further investment in other facilities until the end of the contract period.
The companies, on the other hand, have found themselves with a guaranteed source of long-term income, whilst all the risk remains with their customers. It’s a completely unequal partnership, and has been from the outset.
No real surprise then that the CBI – which represents the sort of companies which have benefited – is again pressing for Wales to use PFI. From their perspective, it’s a neat way of transferring resources from the public sector into the private one. But over the long term, it also means that the public sector gets less for a given amount of expenditure – the opposite, in effect, of what the CBI and other organisations have long been urging on government.
The Welsh Government is absolutely right to rule out PFI – and I hope that they will continue to do so.