Research, knowledge and collaboration Dilemmas of the PFI

Extract

Although the Department for Education and Skills' ‘Classrooms of the Future’ and ‘Design Exemplar Initiative’ are to be welcomed (arq 7/3+4, pp244–279), they should not be allowed to obscure the far-reaching issues involved in the Public Finance Initiative (PFI). As a procurement process, PFI represents a massive investment in social programmes and public building projects: the estimated £34 billion in contract or commissioned gives an indication of this. PFI transfers the responsibilities and risks associated with the procurement, delivery and management of public buildings and estates over a period of 25 years to the private sector, and almost none of the expenditure involved is reflected in the Public Sector Borrowing Requirement. This makes it highly attractive to government, but the question remains as to how much it mortgages the nation's future because it merely defers and extends borrowing. If schemes mature at a time of recession or serious budget deficit, the implications could be highly damaging.