The private finance initiative: PFI in the NHS---is there an economic case?

Investment under the private finance initiative costs more than public sector procurement. The annual charge for the use of privately financed facilities is between 9.1% and 18% of the original construction cost, whereas as government can borrow at interest rates of 3.0% to 3.5%. The extra cost of private finance is disguised by the Treasury's insistence that NHS trusts discount costs at 6% per annum when comparing the costs of the private finance option with public sector investment. The amount of risk transferred to the private sector under privately financed deals has been exaggerated, leading to spurious attributions of additional value to private sector options.