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The Private Finance Initiative

Condensed Article

Article edited by Rob Pinkham

This article includes
  • What is a PFI?
  • Types of PFI
  • What are the disadvantages and advantages of a PFI?

What is a PFI? The private finance initiative (PFI) has proved one of the most controversial domestic issues of Labour's period in government. The term Public Private Partnership (PPP) describes any private sector involvement in public services including the transfer of council homes to housing associations using private loans, and contracting out services like rubbish collection or hospital cleaning or 'back office' services to a private companies.

The PFI is a form of PPP in which the private sector can both develop and operate aspects of new or refurbished public sector provision. Under a PFI scheme, a capital project such as a school, hospital or housing estate, has to be designed, built, financed and managed by a private sector company or consortium, under a contract that typically lasts for more than 20 years ...



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