Mind the Time Bombs in Labour's Building Binge
An overlooked aspect of the Labour government's near-$1 trillion plan to rebuild Britain's infrastructure is its decision to resurrect the use of public-private partnerships. These, under the title of 'private finance initiatives,' gained such notoriety for their poor value for money and sometimes disastrous delivery that a former Conservative government scrapped their use for future projects in 2018. Labour says the lessons of the past have been learned. Reassured? If the answer is 'no,' you're not alone.
The UK pioneered the PFI model in the early 1990s, though as with other great British inventions such as soccer and railways, it has been less successful than other countries with its performance. The idea is simple enough: Instead of building hospitals, schools and the like, the state enters into contracts with private companies that will finance, design, maintain and sometimes operate them. The attraction for the government is that it avoids the upfront capital outlay and transfers risks such as construction delays and cost overruns to the private contractor, in exchange for a stream of regular payments typically lasting 25 or 30 years.
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