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
Money should be priced in such a way that spending it is a decision. Saving should also not cause the value to erode (overly).
The government’s repayment problem isn’t the interest rate, it is the volume of debt
June 2, 2026
Well it the volume of debt, the interest rate, the lack of growth (or any prospect of growth with these policies) and the fact the the money is largely not being “invested” sensibly just wasted or worse spent actively doing net harms like HS2, Covid “Vaccines”, lockdowns, Net Zero, absurdly high benefit payments to encourage people to parasite off others…
June 2, 2026
Money is prices by supply and demand. Very low confidence in this government reduces supply and government policy has increased demand.
June 2, 2026
If Rachel Reeves has found banks and investment funds with money, the backbenchers will be expecting the government to tax that money away, rather than borrow it.
June 2, 2026
Maybe Gordon Brown will advise her.
I imagine potential lenders might be thinking ‘I saw you coming’ when they meet.
June 2, 2026
Wasn’t it a cabinet minister who said, the only thing they talk about is how can we raise more taxes to pay the welfare bill. This is the problem why we’re bankrupt.
All the liebour government is interested in is paying their client state and immigration bill.
When are we going to here that welfare is to be cut.
The large Civil Engineering companies must be over the moon knowing the lack of expertise in government when negotiating contracts. HS2 o steroids.
June 2, 2026
Little wind today and solar much reduced detox low cloud so we import 22% of our electricity at £122 per mwh. Subsidising French and Norwegian consumers.
June 2, 2026
@Mick – the honest thing would be for the whole of Parliament to resign and there to be a General Election. As much as we see Reeves as the culprit, everything she does gets approval from the PM, the Cabinet and Parliament otherwise it wouldn’t happen
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
Whilst I certainly agree we should not be dumping dirty water into the rivers and seas, was not that the designed intention when the system was first constructed, done so to avoid back flooding into houses in times of storms.
The fact that the population has almost doubled and water usage increased since that time has not helped the situation, neither has up to date monitoring (other than making us now aware) there was no monitoring in decades past so the scale of the problem was never really known.
The truth is the whole system needs a complete upgrade and rethink at a cost of £Billions, and with major disruption for years, before any real improvements will happen.
The cost will either be down to shareholders, customers or the government thus we will all pay in the end !
June 4, 2026
When a new home, or, in this London case, a block of flats, is built, don’t the water authorities charge the builders a connection fee and the cost of increasing the load on the system to fix the infrastructure to cope?
June 2, 2026
I see the fault lying with dreadful regulation from Ofwat coupled with unplanned mass immigration overloading the system.
June 2, 2026
Many billions have been and are being invested by private water companies SG
The network was starved of investment under State ownership for many years.
As just one example Severn Trent are spending over £15 billion from 2015 to 2030
June 3, 2026
Normally this might be fair observation and I don’t know the Severn Trent situation, however the Thames Water situation is far from fair;
1. Water company customers are captive, we have no alternative supplier.
2. As a Thames Water customer well outside London I am charged a 10% tax by TW to fund the super-sewer that only Londoners get any benefit from. In addition to ..
3. Over a number of years Thames Water were loaded with increasing debt by foreign owners while paying themselves large dividends. So how much investment has there been really.
Reply
The large new sewer was a complex and expensive large project like building an underground line which cleans up London sewage helping the Thames and seaside to the east of London affecting many non Londoners.
June 3, 2026
dixie
Thames Water is investing over £20 billion in the 2025 to 2030 period.
June 2, 2026
In a free market, only those using a service would pay for it.
June 3, 2026
There would also be the opportunity for competition, which there isn’t with water.
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
I am no apologist for government and taxes but the young entrepreneurs leaving this country are doing so as much for lifestyle reasons and tax.
June 2, 2026
and why not? The field next door might be more attractive.
June 2, 2026
Agreed, most of those leaving have funds or earning power, most those arriving have little, and they will drain the State further at the taxpayers expense for a good many years, some forever..
Benefits are tax free !
Without any meaningful control the more that arrive, the faster we decline as a Nation..
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…
June 2, 2026
The complexity end up with hospital and schools paying £ thousands to middle men to get someone to change a light bulb, rod a drain, repair a window or take a football from blocking the gutter.
June 2, 2026
Plus often endless arguments & legal disputes a parasitic job creation scheme.
June 2, 2026
I’m about to have some work done at home. Both the Tradesmen involved are semi-retired and have different motives for continuing work. The main one seemingly being that they will do so a while longer whilst they still can but only accept jobs when (& if) it suits then. Both are very skilled men but have decided to only take on certain types of work. One explained that he could take on any type of electrical work at one time but that now you needed the right certificate for every type of job. These certificates cost money to get and don’t last – so he simply doesn’t accept certain work. More worrying, is that many of their trade friends are already retired and there is no one replacing them. It’s already pretty difficult to get good, experienced people and it seems this will become much harder as time passes.
June 2, 2026
The other problem I see all the time is people educated into stupidity by universities, schools, the college of policing, the fire brigade (witness the incompetence at Grenfell Tower), the “experts” who pushed the Net Harm Covid lockdowns and vaccines on almost everyone, magic money tree economists, safety experts often pushing safety solutions that can be more dangerous not less, the climate alarmist pushers, pushers of mad religions old and the new woke, white privilege skin colour is everything, reparations and the CO2 devil gas ones. The dire BBC is to the fore in all this lunacy stuffed as it is with rather dim art graduates.
One of the problems about knowing a bit about physics, energy, engineering, statistics, maths, business is that you tend to endlessly read things by people, supposed experts, chancellors, energy ministers and other politicians and wonder why on earth they are in such positions when they are so ignorant and irrational.
It seems from polls that if we had only women under 40 voting we would have an overwhelming Green Party majority in parliament. God help us!
June 2, 2026
Recent data from YouGov and Ipsos shows that nearly half of female voters aged 18 to 24 favour the Green Party. If only women under 50 voted, the Green Party would hold a vast parliamentary majority.
The country would be bankrupt and overwhelmed by migrants, drug addicts, riots… even more quickly than under doom loop Reeves and Starmer!
Robert Tombs in the Telegraph
France is set to descend into chaos. Britain can still avoid this fate
Robert Tombs
Let us hope so I am not so sure after three more years of this appalling government.
June 2, 2026
Good morning.
I think it is time ‘we’ the little people started have a say whether or not we want to pay these deferred debts. For that is what PFI under Labour is. If there is nothing in the party manifesto, then we, or at least the Lords, should have a say whether or not we wish to assume these new debts.
PFI works best where there is a project that requires special knowledge and / or is of a high risk. By using the skills of the Private Sector the government can mitigate any risk to itself by delays and cost overruns, but must pay a small burden through what is in effect a form of Higher Purchase Agreement. Done on a small scale, as was originally intended, it is a very useful tool. But as a means to spend, spend, spend, and leave a huge debt for both future government and taxpayers is both reckless and immoral.
Government is out of control and needs to be reigned in by the electorate.
June 2, 2026
PFI is far too difficult for the likes of Rachel Reeves, well above her level of incompetence.. If the UK really needs PFI, it must first install a government that doen’t hate the country and its people and will act in their true interests. Allowing Reeves and Starmer’s Gang to organise PFI will queer the pitch for any future attempts. The next government after Starmer’s Gang would have to renegotiate the contracts. Change the government first.
June 2, 2026
Today marks a turning point, lots of cops and ex cops are taking to social media to express disgust at their fellow officers and leadership.
Hopefully something good comes out of this.
June 2, 2026
Indeed it was a bad mistake by these perhaps “educated into stupidity” officers but it was a bad mistake that lasted only for three minutes or. The officers were at worse a bit slow to size up the true picture and clearly not of evil intent. Whatever they had done the poor victim would have died it seems.
Shut the College of Policing and the two tier justice system down in memory of him perhaps? The College seems to do nothing but harm for policing in the UK.
June 2, 2026
I think the New Labour Government saw PFI as a good wheeze to get something for nothing.
It was all off the books and someone else would have to find the money and honour the debt.
Like other obligations such as pensions there is no accountability or responsibility on the current incumbents.
June 2, 2026
PFI is a bad option for an incompetent Chancellor
June 2, 2026
It is never ‘Public’ funding when the taxpayer is having offer(have it taken) their hard earned money and the government/parliament refuses responsibility.
On every level its is wrong when the taxpayers money is spent, given away and those that take the money with the force of law behind them not then ensuring the purchase delivers a return, a quantifiable return. What’s the point of government of parliament when they shirk the responsibility given to them.
Parliament has a habit of squandering other peoples money, usually irresponsible just to look for point scoring come election time.
June 2, 2026
PFI in Labour’s hands, especially with Rachel from Accounts arranging it is likely to be an extreme risk and places an even greater burden on any better government following.
June 2, 2026
Labour often claim that public utilities/infrastructure should not be in the private sector as profits are “creamed off by shareholders”. And yet they are happy to promote PFI initiatives for infrastructure where interest payments are creamed off by shareholders instead. Their position is incoherent. As an example, 100 hospitals in our NHS were built under PFI and leased back to the NHS on expensive long-term contracts thus transferring NHS funding directly to the private sector. That’s all fine (if it works) but goes against their constant claims that our NHS shouldn’t be privatised.
June 2, 2026
I question the 2nd half of the comment:
“There is nothing wrong with private capital financing infrastructure. In the UK it has worked very well for broadband cables.”
In ‘the back of beyond’ there has been a duplication of telecoms cables. Very expensive compared to the ‘regulated natural monopoly’ model applied to BT from 1984 to I think 2002. The Lords recommended in 2012 reverting to this approach to broadband to facilitate its rollout. It was not done.
Given the un-integrated nature of telecoms retailers vs Openreach – it owns the infrastructure they all rent from Openreach – the ‘digital switchover’ in places is chaotic. Not everyone wants or can even access a mobile within the building. Those who have no or low mobile signal (even in the garden) may want to continue with the ‘landline’ but they find the ‘telephone line provider’ is clueless on this issue. Two people have lost phone service for a few weeks by following its written instructions.
June 2, 2026
Another dreadful PFI deal was that of the financing of the EDF EPR nuclear plant Hinkley point C (HPC) initiated by PM Cameron, Chancellor Osborne and the SoS for Energy & Climate Change, Ed Davey and given final approval to proceed by PM May. They decided to use Chinese finance at 9% instead of using government borrowing at 2%. Professor Sir Dieter Helm, professor of economic policy at Oxford University, told the BBC in 2018 that the cost of HPC would have been halved if the Government had borrowed the money itself at 2% instead of using Chinese capital at 9%:
https://www.bbc.co.uk/news/business-44363366
Exactly the same EDF EPR technology was used to build a plant at Olkiluoto, Finland, which according to the Chair of the Energy Security & Net Zero Committee in an oral evidence meeting 15/11/2023 (Q142) is supplying electricity at £53/MWhr which is far below either the current CfD cost of HPC at £131/MWhr or the latest fixed offshore AR7 wind CfD at £97/MWhr. The Finnish used a RAB method for financing, which has now been chosen to finance Sizewell C.
https://register.lowcarboncontracts.uk/?search=Hinkley
https://register.lowcarboncontracts.uk/?search=offshore+wind
https://committees.parliament.uk/oralevidence/13815/pdf/
June 2, 2026
+1 they cannot run thing well and they cannot delegate them to the private sector efficiently either.
June 2, 2026
PFI was a way for Labour to keep spending even when it did not have the money to do so! The long-term cost did not matter, as long as Labour could say here is a new hospital, here is a new school, aren’t we wonderful.
There is no one in this Government, no one in the Civil Service, who is smart enough to negotiate a PFI agreement that is a benefit to the UK, rather than a drain.
Until we get a Government that seriously cuts government spending, we should stop building anything. But it is only taxpayers’ money, so why worry? If Labour MPs ran their personal finances like they run the governments, they would soon face disaster. How does our education system produce such idiots!
June 2, 2026
PFI can be good (for politcians) or bad (for the taxpayer)
June 4, 2026
Can you please explain one of two examples of a bad PFI deal signed up by the last Labour government, one with high costs that we are still paying for?