The UK lacks a “credible pipeline” for infrastructure projects, which has led to a “drain of skills overseas” and billions of pounds owed to ongoing private finance initiative (PFI) contracts, MPs on the Public Accounts Committee (PAC) have said.
In a report, it warned that overuse of PFI has led to poor-quality assets being handed back to the public sector.
The system was first introduced in 1992 under John Major’s Conservative government. The idea was to involve private sector investment in public infrastructure projects such as hospitals, schools, roads and prisons. From 1997 onwards, Tony Blair significantly expanded the use of PFIs, particularly for NHS and education projects.
But criticisms of PFI grew over time, with concerns that the projects offered poor value for money. In 2018, then-Chancellor Philip Hammond eventually announced that the government would no longer use the scheme for future projects.
For all the 665 ongoing PFI contracts, public bodies are still liable to pay...