THE PRIVATE Finance Initiative (PFI), the Government's scheme to foster private investment in public projects, will raise about pounds 11bn for the country's infrastructure over the next three years, the Chancellor of the Exchequer, Gordon Brown, said yesterday.
The funds will be spent to modernise crumbling buildings, including more than 1,000 schools, more than 25 hospitals and "dozens of public transport projects", Mr Brown said in its pre-Budget statement. The PFI investment would be boosted by a doubling of public investment over the next three years. Mr Brown told MPs that this was the "right decision and the right course of action" for the country.
He said the Government's efforts to streamline and speed up the PFI process were behind the new wave of investment.
Since coming to power in May last year, Labour has identified key projects to be given special help by the PFI Treasury Task Force - the team charged with encouraging private firms to invest in public projects. The increased focus on a small number of projects was welcomed by private contractors who had complained that red tape and the need to test each public project for PFI had created a project log-jam.
The Government is also due to publish a long-awaited series of model contracts following years of campaigning from private-sector contractors.
The new investment will almost double the amount spent by private-sector firms in the six years since the PFI was introduced. Under the scheme, private contractors agree to build, maintain and operate a public sector building, usually for 25 to 30 years, in exchange for a yearly rent from the government department or local authority using the facilities.
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