For most NHS organisations, PFI has been, in the words of former health secretary Alan Milburn, the "only game in town". This is largely due to anomalies in financial reporting standards. For most of the last 17 years, PFI has been "off-balance sheet" for NHS Trusts and other NHS organisations (though this is no longer the case). PFI has also been out with the capital budgets of the Department of Health (thereby easing the constraints on that budget); and invisible to the calculation of public sector net debt (which of course has been important-and remains important to the Treasury). It still retains these advantages to both the Department and the Treasury.
PFI has provided successive UK governments with an opportunity to keep public sector net debt artificially low-nearly 96% of all UK hospital schemes were off-balance sheet; that is, excluded from public debt figures (HM Treasury 2009b) While most will now be on balance sheet, they will still be invisible from the perspective of departmental capital budgets and public sector net debt. Price water house Coopers (2008) have observed that current accounting standards are used as "accounting driver for implementing projects through PFI" (p1) and that these rules have provide an adverse incentive to allocate risks to the project company inappropriately, simply to preserve the off-balance sheet status of (some) PFI projects (ibid).