PFI was a disaster — Labour mustn’t repeat it’
PFI – the Private Finance Initiative – is a private finance model which was hugely popular under the Blair government. It was popular because it allowed politicians to deliver new public infrastructure – like hospitals – while keeping the debts off the public balance books. However, we now know that PFI was a complete disaster.
In 2017, the Office for Budget Responsibility described using ‘off-balance sheet’ financing for public infrastructure in order to dodge borrowing rules as a ‘fiscal illusion’. In 2018, the Conservatives highlighted the potential risk of PFI to government finances, and said ‘goodbye to PFI’.
READ MORE: 7th November, 2025, 6:00 am Budget 2025: Full list of Labour MPs backing wealth tax motion
Most significantly, PFI has cost us dearly. Research has found that taxpayers are paying £80 billion for just £13 billion of actual investment. PFI has resulted in hospitals repaying what they originally borrowed many times over. One trust – the Essex Partnership University NHS Foundation Trust – has paid back 27 times what was borrowed under PFI.
Private Finance harms patients
As a result of NHS PFI deals, scarce resources are being diverted away from patient care, and towards private profit.
In the last five years alone, NHS trusts have spent more than £1.8 billion on PFI interest payments. This would have paid for the starting salaries of 50,044 new doctors. Some hospitals are spending more on repaying PFI debts than they are on medicines for their patients.
In January 2013, major A&E, maternity, paediatric and acute adult services at Lewisham Hospital were nearly closed down in order to make up for astronomical PFI debts in the South London Healthcare Trusts. These lifesaving services only stayed open because campaigners challenged the decision and won.
The key takeaway to be gleaned from close analysis of each of these models is that they are fundamentally the same. In each of its iterations, private finance demands that the taxpayer pay back an amount which far outstrips the cost of the asset itself.
Cardiff’s Velindre Cancer Centre, for example, was built under the Welsh MIM model, and will result in the Welsh government paying back almost three times what was borrowed. Member of the Senedd Carolyn Thomas has already described MIM as ‘more expensive in the long run – with higher repayments that ultimately cost taxpayers more for the same infrastructure’.
Time and again, private finance has failed both patients and taxpayers. It is clear that the only lesson worth learning from the disaster of PFI is that private finance has no place in our healthcare system.
PFI and bad effects on the Workplace and the Equality.
Private Finance Initiatives (PFI) and associated private contracting have been frequently criticised for facilitating the exploitation of workers, particularly through cost-cutting measures, outsourcing, and the erosion of employment rights to maximize corporate profits. These schemes often result in lower pay, poorer working conditions, and reduced security for staff in key sectors like healthcare, cleaning, and security.
How PFI and Private Companies Drive Worker Exploitation
The Pursuit of Profit Over Service: PFI models are profit-driven, which encourages companies to cut costs on staff wages, benefits, and training to maximize returns.
Outsourcing and Subcontracting: Large multinational corporations (e.g., ISS Mediclean, Carillion) often take over public services, leading to the fragmentation of the workforce and the introduction of insecure, low-paid, or zero-hour contracts.
Suppression of Wages and Conditions: Private firms often reduce pension rights and benefits for workers compared to their public sector counterparts.
Exploitation in Vulnerable Sectors: In the NHS, PFI-linked companies have been accused of "screwing" workers, with staff reporting being forced to work harder for less pay, leading to a "gathering revolt" against private bosses..
NHS Privatization: Studies indicate that PFI deals have diverted money from frontline services to private profits, such as in the case of Southmead Hospital, where funding was funneled away from staff and patients.
Construction and Service Sectors: Research by FLEX found that in the London construction sector, 36% of workers had experienced wage theft, 53% worked in dangerous conditions, and 50% did not have a written contract.
Financial Instability: The shift to zero-hour contracts means workers are often only paid for hours worked, with little security or guaranteed income.
Health and Safety Risks: The drive for "efficiency" can lead to reduced staffing levels and dangerous working conditions.
Erosion of Collective Power: Privatisation has targeted unionised sectors, weakening collective bargaining rights and making it harder for workers to demand fair pay and dignity.
The PFI model has been criticized for creating a long-term "debt trap" for the public sector, with £59 billion in investment projected to cost £306 billion over its lifetime. The overall effect of this structure is to place significant financial and operational pressure on staff to maintain profitability for private, often tax-haven-based, special purpose vehicles.
Please sign the petition, its really important for everyone that have better workplace environment with Equality and better pay rates.
Faycel Derbeli
Faycel Derbeli Contact the author of the petition