Government’s use of private finance for infrastructure

The Government has identified infrastructure investment, delivered in partnership with the private sector, as central to growing the economy. The Chancellor of the Exchequer announced in October 2024 that the Government would increase public sector net investment (PSNI) to 2.6% of GDP during the Parliament, with over £100bn of additional capital invested over the next … Show more

The Government has identified infrastructure investment, delivered in partnership with the private sector, as central to growing the economy. The Chancellor of the Exchequer announced in October 2024 that the Government would increase public sector net investment (PSNI) to 2.6% of GDP during the Parliament, with over £100bn of additional capital invested over the next five years. There is a wide range of private financing models including the extensively used Private Finance Initiative (PFI). Sources of private finance for the initial capital investment include institutional investors (such as banks and pension funds) provided in the form of debt and equity or related financial instruments. In a 2018 report on PFI, the PAC found that PFI was not working for the taxpayer, with various projects’ owners increasingly remote from the public service being delivered, and offshore owners of these projects paying little tax, thereby reducing one of the benefits used to justify the contracts in the first place. In 2025, the National Audit Office (NAO) has set out lessons from its past reports on Government’s use of private finance for the delivery of infrastructure assets. Based on the NAO report, the PAC will hear from senior officials from HM Treasury and the Infrastructure and Projects Authority (IPA) on subjects including costs, benefits, risks and opportunities of the approach, as well as preparation for the increasing number of PFI contracts set to expire over the next decade. If you have evidence on these issues please submit it here by 23:59 on Monday 28 April 2025. Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. Please note that the Committee’s inquiry cannot assist with individual cases. If you need help with an individual problem you are having, you may wish to read the information on Parliament’s website about who you can contact with different issues . Show less