Page "Private finance initiative" Paragraph 17

By October 2007 the total capital value of PFI contracts signed throughout the UK was £ 68bn, committing the British taxpayer to future spending of £ 215bn over the life of the contracts.

The global financial crisis which began in 2007 presented PFI with difficulties because many sources of private capital had dried up.

Nevertheless PFI remained the UK government's preferred method for public sector procurement under both Labour and the present coalition.

In January 2009 the Labour Secretary of State for Health, Alan Johnson, reaffirmed this commitment with regard to the health sector, stating that “ PFIs have always been the NHS ’ s ‘ plan A ’ for building new hospitals … There was never a ‘ plan B ’".

However, because of banks ' unwillingness to lend money for PFI projects, the UK government now had to fund the so-called ' private ' finance initiative itself.

In March 2009 it was announced that the Treasury would lend £ 2bn of public money to private firms building schools and other projects under PFI.

Labour's Chief Secretary to the Treasury, Yvette Cooper, claimed the loans should ensure that projects worth £ 13bn — including waste treatment projects, environmental schemes and schools — would not be delayed or cancelled.

She also promised that the loans would be temporary and would be repaid at a commercial rate.

But, at the time, Vince Cable of the Liberal Democrats, subsequently Secretary of State for Business in the coalition, argued in favour of traditional public financing structures instead of propping up PFI with public money: