Under the Private Finance Initiative (PFI), the public sector enters into long-term contracts with private sector companies to design, build, finance and operate a new facility such as a hospital or school. The policy was introduced by the Conservative government in the autumn budget statement of 1992 and, since then, it has accounted for a significant proportion of large-scale investment projects in areas such as health, education, defence, transport, council housing, water infrastructure and waste management (HM Treasury 2008). As of March 2008, 627 PFI schemes had been signed in the United Kingdom, representing privately financed investment of £58.2 billion.
In Northern Ireland (NI), private finance has been used as a method of increasing investment in public services, which are widely perceived to have suffered from under-funding in recent decades. The use of PFI projects, or public private partnerships (PPPs) as they are more commonly known in NI, has increased since the late 1990s. As of March 2008, there were 35 PPP contracts signed in NI, providing private investment of £1.29 billion. A further 13 contracts, with a capital value of £1.94 billion, are being negotiated with private sector bidders and will be signed by 2012.