How do private finance initiatives work?

Under a private finance initiative, the private company handles the up-front costs instead of the government. The project is then leased to the public and the government authority makes annual payments to the private company.

What is Private Finance Initiative in construction?

A private finance initiative (PFI) is a way of financing public sector projects through the private sector. The project is then leased to the public, and the government authority makes annual payments to the private company.

What is the Private Finance?

Private finance is the study of income, expenditure, borrowing and financial administration of individual or private companies. Both public and private finance are fundamentally similar in nature but different from each other on various operational aspects.

How did austerity cuts affect the NHS in the UK?

A decade ago, when the Coalition government began its austerity cuts, spending on the NHS was supposed to be ‘protected’ from the cuts inflicted on other public services. It is true that average real spending on health and social care increased by 1.4% a year.

When did the private finance initiative start in the NHS?

PFI, or Private Finance Initiatives were deals set up with the private sector companies to organise over 100 NHS hospitals building schemes from 1992 onwards. The policy was conceived by the Conservative government of John Major but predominantly advanced under Labour.

How does PFI affect the funding of the NHS?

When PFI began it was during an era of rising funding for the NHS but in recent years the NHS has seen flat funding and unprecedented cost cutting. We have seen how PFI contracts wrap NHS trusts up in a schedule of rising payments. For some the debt has become toxic, but most contend with PFI pressure that will not recede without intervention.

Is the UK in a decade of austerity?

6A decade of austerity? The funding pressures facing the NHS from 2010/11 to 2021/22 Spending on the UK NHS as a share of national income has more than doubled since its introduction in 1948, rising by an average of four per cent a year in real terms.