MPs have today released a report that is highly critical of the Government’s use of Private Finance Intiatives (PFI). It warns that PFI are not a cost-efficient method of building hospitals, schools and roads.

The Treasury Select Committee says that ministers are using PFI as a way to keep capital spending from adding to official debt figures. According to the committee, PFI debts cannot be used to exceed departments budgetary limits. Using PFI, the cost of capital is 8%, twice as high as the Governments own borrowing rates.