There is nothing wrong with private capital financing infrastructure. In the UK it has worked very well for broadband cables. The Thames tideway tunnel to give London more dirty water handling capacity has been a model project financed by the private sector.
There is much wrong with bogus private finance schemes of the kind Labour went in for when it was last in government. PFI for NHS hospitals or state schools often turned out to be dear money, locking the state into expensive service contracts and dear borrowing.
The Chancellor thinks she can take pressure off her borrowing by going for PFI. There is a great danger that she allows deals that leave substantial risk with taxpayers. Markets will regard this as more back door state borrowing. Taxpayers will pay more to borrow this way. Public spending will continue out of control.The public sector must not lock itself into more bad contracts through its inability to specify a fair terms contract and stick to it.
State investment has brought us the disasters of HS 2 and Post Office computerisation. Labour’s last PFI s lumbered too many schools, hospitals and the taxpayer with too many long term bad contracts just to get the debt off the state’s books at great cost. The debt is still out there, and the taxpayer has to pay.
June 2, 2026
The Chancellor thinks she can take pressure off her borrowing by going for PFI.
The best thing Rachel from accounts can do is resign and take the rest of her motley crew with her, while there’s a liebour government in power this country will continue down the very steep slippery slope to financial ruin always as been with the liebours through the decades
June 2, 2026
What the markets want to see to reduce interest rates is a total reversal of her doom loop economics, a government that inspires confidence, encourages inward investments and delivers some positive growth policies. Investment only where the projects produce sensible returns and are sensible lay financed and structured. The markets are not that easily fooled by incompetent PFI funding like the ones that Brown gave us. This was just a very expensive way for the government to borrow and largely waste or spend doing net harms.
The government need to firstly stop doing things that spend £billions to do net harm things like Net Zero, benefits that are too high relative to wages, payment that augment low skilled and often criminal immigration, £600 bn on net harm Covid Vaccines and Lockdowns, HS2…
Pat McFadden “Every meeting I have with Labour MPs is “who can we tax in order to pay benefits to other” thus decreasing growth and augmenting the feckless. Worse that just tipping it down the drain.
June 2, 2026
“The Thames tideway tunnel to give London more dirty water handling capacity” has been financed by a significant hike in water charges for Thames Water customers outside London, ie those who see zero benefit, hardly a model project from the oiks perspective.
Actually we have seen negative benefit with the opportunity costs of unfixed leaks and illegal effluent dumping.
I would be far more supportive of such projects if the funding were raised by public subscription than what is actually extortion of the public by a privatised monopoly.
Reply The scheme was on time and on budget. Cleaning up our dirty water act needs all of us to pay one way or another.
June 2, 2026
@JR
“Cleaning up our dirty water act needs all of us to pay one way or another”
The people who need to pay are the private equity firms who bought the water companies when they were privatised all those years ago. They loaded a critical infrastructure industry – with no debt – with huge borrowings and instead of investing in the industry, paid the money out in dividends and mega-bonuses for senior management
June 2, 2026
John, your last line, “the tax payer still has to pay” is the most important point and one the tax payers are alive to.
it is that simple truth that is causing the actual big tax payers to leave the UK because they know they have zero control over government excess and they know this government will hand them the bill.
The loss of our young entrepreneurial class who aare leaving at an accelerating rate is further evidence that government policy is driving tax payers away. They are leaving looking for lower risk places to live and grow their worth free from state interference.
The result of this wealth flight trend, will be lower taxation return for government and a lower standard of living for all.
It may have been true to say the tax payers will pay, but the smart ones are leaving, the benefit class don’t have the resources to fund state excesses, they pay zero tax. There is only ever going to be one outcome for the country’s finances and it is not good.
June 2, 2026
Indeed, and another sinful act against us all – and it was all for show.
HMG has had little success with making big projects work, so PFI gives them the opportunity to parcel off some of the blame.
The debt piled up from school/NHS buildings should never have been allowed to happen, but does show another inept side to socialists – they cannot negotiate a good contract.
June 2, 2026
IN BUSINESS complexity is so often bad and PFI led to all sorts of abuses of the system just as leasehold property ownership does with freeholders and managing agents and endless legal arguments.
We need a system that augments the jobs of people doing useful things (farming, drilling, mining, fracking, building, transporting, pot hole filling… and reducing those generally not like lawyers, hr experts, compliance people, red tape producers, tax planning people, motorist muggers, Mayors of London or Manchester, Reeves, Starmer, no deterrent policing and justice…