Was PFI worth the risk?

The Private Financial Initiative (PFI) program set up by previous governments looks set to saddle the NHS, along with other government departments, with enormous financial liabilities in the future. It was revealed today that the total bill for new hospitals in the UK will reach £65 billion despite the fact the projects were valued at just over £11 billion upon inception. While there are obviously maintenance, cleaning and catering costs to be taken into account there's no doubt that these "PFI mortgages" are coming back to haunt the authorities.

While the current coalition government would like to pass all of the blame over to the previous Labour government the truth is that a number of political parties have been heavily involved in promoting PFI. This came despite the fact that experts warned about the long-term cost of PFI projects which effectively reduce the short-term liability of the authorities in favour of spreading a larger debt over a longer period. The truth is that the real impact of the PFI initiatives currently in place will not be felt for many years to come.

There is no doubt that there have been many short-term benefits from using the PFI strategy although perhaps a better balance should be found between the initial outlay and the overall cost.