It was the Conservative Government that originally launched Private Finance Initiative (PFI) but it was under the Labour Government that it did well. However, though this initiative was meant as a short-term cost saving scheme, many of its projects have become long-term liabilities for many departments.
According to a recent report released by the government, the PFI projects launched under NHS are creating liabilities of £50 billion more than the initial cost of the project. This is about 5-6 times more than the initial cost of the project. This has resulted from long-term contracts that had been drawn up with certain establishments.
It appears that long-term financial consequences far outweigh the project outcome. In departments such as NHS and Education, funds that were reserved for future projects are being diverted to historic projects.
It is not sure whether the UK government will stop PFI initiatives any time sooner, but the long-term repercussions of these projects will have an impact on the projects planned by NHS.
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