The Private Finance Initiative (PFI)

Politics. Ugh, British politics. The Private Finance Initiative (PFI).

PFI is a type of public-private partnership in which the government hires a private company to build and maintain some infrastructure - roads, schools, hospitals, etc - for regular payments over many years. It began in the Thatcher and Major governments of the 80s and 90s, and was extended under the Blair-Brown governments until it became a cornerstone of public policy.

PFI contracts are kept very secret, so there is little chance of the general public - whose money is being spent - finding out whether they are getting a good deal. The private companies involved have no formal responsibility to the public; contractual obligations are kept secret: PFI contracts cannot be obtained through freedom of information requests.

There is very little competition for PFI contracts: the companies that go for them often work together to rig the bidding process (one company will submit an unrealistically high bid, and then another will submit a slightly less unrealistically high bid, which comparatively looks like a good deal). The companies increase the costs after construction has begun: a recent analysis found that 719 projects with a shared value of £55 billion will cost a minimum of £301 billion over fifty years. Thus, PFI is a mechanism which redistributes wealth from the masses (the tax-paying population) to a rich minority (private company shareholders).

Source: 'How Corrupt Is Britain?' by David Whyte