PFI deals in recession: Singing the blues

Recession is heaping problems on a controversial form of public investment SQUINT a bit and it could be the early 1990s. The recession—and the government’s subsequent Keynesian conversion—has shattered the cosy consensus that once existed on public spending. At a bad-tempered Prime Minister’s Questions on July 1st, David Cameron, the Conservative leader, accused Gordon Brown, and not for the first time, of misleading the public over the scale of the spending cuts (or tax rises) needed to bring the national accounts back into balance. For his part, the prime minister is keen to raise before the public the old spectre of “Tory cuts”. Spending is shaping up to be the main battleground of the next election. That will refocus attention on the Private Finance Initiative (PFI), a public-spending approach under which private firms build and run bits of national infrastructure in return for decades of payments from the government, all enforced by contracts lasting for 20 ... (link)