3.4 PFI has failed to shift the risk of project failure onto the private sector. If a project runs into serious trouble, the Government has to take action to secure its viability because "the political consequences of letting most PFI contracts go to the wall are usually too great."18 Hospital projects are simply too important to be allowed to fail. This has been demonstrated recently with the Government setting up a new unit within Treasury to provide capital funding to PFI schemes frustrated by the lack of credit available in the current financial climate. Further comment on this can be found at 8.2.
4. How effective and costly has it been to monitor the private sector providers' performance and quality of service in Private Finance projects in comparison with traditional procurement? And
5. When the basis of a Private Finance contract needs to be altered post procurement because of changing client needs- for example, a bigger jail is required due to larger than expected prison population-has this proved problematic compared to projects under traditional procurement? What has been the experience of PFI projects that have reverted to the public sector?
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18 The Economist (2009) PFI deals in recession: singing the blues, The Economist, 4 July, at p 29.