Chancellor unveils “son of PFI” to build next generation of hospitals

A new wave of hospitals will be built under a revamped version of the discredited private finance initiative (PFI) scheme, the chancellor of the exchequer, George Osborne, announced to the House of Commons in his autumn statement.

In a document published the same day outlining how the new public-private partnerships, to be known as PFI2, would work, the Treasury admitted that the existing PFI scheme had “become tarnished by its waste, inflexibility and lack of transparency.”1 Costly and inflexible PFI deals that tied trusts to expensive and inflexible contracts for many years have been blamed for the financial instability of at least 20 trusts.2

Osborne told MPs that the public sector had been “ripped off” by PFI schemes in the past. “The big difference is that from now on, instead of the public sector bearing the risk and getting none of the reward . . . it will share in the upside as well.”

“Soft” services such as cleaning and …