Nearly 17 years ago, as a civil servant, I sat in a meeting with the Principal Finance Officer to be told that the £500k for my IT project had been suspended by the Treasury as they were of the view that "private investment and accompanying expertise" was the way to go! The inept Major administration was in its death throes and everyone, except the Treasury, agreed that this was by far the craziest idea they had come up with to date, but would promptly die after the election.
Not so - within three years, "New Labour" had swept into power and had seized the idea with the zealotry of an Al Qaeda suicide bomber. Project costs rose, rational business cases were binned and expensive lawyers and consultants grew rich as contracts running into thousands of pages were put into place. Any attempts to suggest this was anything other than enlightened financial benevolence and the future for public contracts was treated with the contempt usually reserved for Flat Earthers. Yes, and I was one of those that considered this, alongside self certifying mortgages, as an act of commercial insanity.
The good news is that it appears to be over. George Osborne has been quoted in the Financial Times as saying "we have consistently voiced concerns about the misuse of PFI in the past and we have already taken steps to reduce costs and improve transparency." But is it? The government has no money and capital / infrastructure projects are classic job creators. Aslo just how good will the ERG renegotiation teams be in securing real cost reductions from the £200B of existing contracts? Don't hold your breath!!