the budget in March 2005 to rise to 37% by 2008, assuming that projected economic growth will be achieved.The Financial Times published an article this spring suggesting that the Office for National Statistics (ONS) was about to reclassify PFI projects.8 Although ONS issued a rebuttal, stating that it "has not taken any decision to change the treatment of Private Finance Initiative schemes in the public finances" as "the element of PFI debts that should be recorded within Public Sector Debt, is an extremely complex and difficult matter," it acknowledged that "ONS has recognised for some time that estimates need to be made and we have been continuously expanding our ability to cover PFI activities and explore possible sources of information."9 This is important because funds for PFI are treated as "off balance sheet" financing and appear as "additional expenditure" to public sector expenditure and are not currently included in the government balance sheet calculations of net debt.Should the Office for National Statistics change the rules, a major component of capital spending under these contracts could be reclassified as debt.This could easily lead to a breach of the second rule, removing the main justification for the PFI model.If the private finance initiative dies in the United Kingdom it may still have a life beyond these shores.Rather like general practice fundholding, it has created a cadre of experts who can now offer their services to the rest of the world.The United Kingdom may, once again, be at least as successful in exporting its failures as its successes.
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Marina S. Morgan (2005) studied this question.
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