B19: Private Finance Initiative

30th January 2004.

The concept of allowing the private sector to deliver public services whilst making a profit has always been a controversial matter.  The Private Finance Initiative (PFI), introduced by the Conservative Government in 1992, does exactly this.  It allows private sector companies to handle the management of a public sector project, such as a hospital or a school.   The Government then pays the company an annual fee on which the private company makes a profit.  There are a number of benefits of PFI, namely saving time and resources within the public sector.

This Bulletin looks at PFI schemes across various sectors, including housing, school and IT, and highlights some valuable lessons learnt along the way.