Tube Public Private Partnership

The state that Tube Lines finds itself in proves that financial risk isn’t transferred from the public to the private sector and that the liabilities should appear on government balance sheets. It is a total lie to say that without PFI/PPP then a raft of public expenditure wouldn’t have happened. It could well have happened if Gordon Brown hadn’t set an arbitrary upper limit for government borrowing. The PFI/PPP deals are said to be delivered on time and to budget but this is AFTER the contracts are signed. The initial costs are much lower but are increased to encourage the private sector to take the ‘risk’ but as Tube Lines demonstrates they don’t take the risk and the cost of borrowing is much higher than if the chancellor had borrowed the money from the usual sources.

http://business.guardian.co.uk/story/0,,2127957,00.html