Alongside this macro-economic usefulness of PFI, there has been an emphasis on the micro-economic objective of providing value for money (VFM).
As shown in chapter 3, the VFM test is a simple one - namely would the PFI provide hospitals at a lower cost than if conventionally financed by the public sector? One anti-PFI argument is that it will not. In this view, privately-financed hospitals are bound to be much more expensive than publicly-financed ones because the private sector's cost of capital is so much higher than that of the public sector. The pro-PFI argument is that this higher cost of capital will be offset by the allegedly greater efficiency of the private sector.