Experience in past projects has demonstrated significant aspects of the model are not satisfactory:
• the PFI procurement process has often been slow and expensive for both the public and the private sector. This has lead to increasing costs and has reduced value for money for the taxpayer;
• PFI contracts have been insufficiently flexible during the operational period, so making alterations to reflect the public sector's service requirements has been difficult;
• there has been insufficient transparency on the future liabilities created by PFI projects to the taxpayer and on the returns made by investors;
• inappropriate risks have been transferred to the private sector resulting in a higher risk premium being charged to the public sector; and
• equity investors in PFI projects are perceived to have made windfall gains, and this has led to concerns about the value for money of projects.
It is also evident that, too often, PFI has been used on projects where its application has been unsuitable and has, therefore, failed to deliver value for money. The previous Government's PFI credit regime provided a budgetary incentive to pursue PFI and, thereby, undermined a genuine appraisal of the optimal delivery route. Weaknesses in the budgetary and value for money framework meant that procurement decisions of government departments were sometimes skewed. This lead to PFI being used in sectors and projects where there was insufficient long term certainty on the future requirements of services; or where fast-paced technological changes made it difficult to establish requirements for the long term.