It’s all very well for the prime minister to promise a new wave of infrastructure projects (by some front-loading of existing budgets) to help stimulate the economy. The pledge has generated plenty of positive headlines.
Ministers haven’t yet explained how this will happen, however, in the face of a struggling market for private finance initiative schemes. PFI has played an increasingly large role in big projects in recent years.
But this report by my colleague Nick Timmins underlines the problems engulfing the sector.
* There were just 34 PFI agreements last year, after 60-plus in each of the preceding years
* There were only 7 hospital deals against 20 the previous year
* Other big schemes – such as Britain’s biggest waste management project in Manchester – are struggling to secure funding
Timmins reports that raising private finance remained “a nightmare” according to one leading practitioner.
And the Building Schools For the Future project (a big part of Gordon Brown’s Keynesian vision) is stil “not out of the woods yet”, according to Tim Byles, chief executive of Partnerships for Schools.