In addition to incomplete and complex contracts, there are fundamental flaws in the PFI/PPP model that have contributed to buyouts, bailouts, terminations and major problems.
• Risk transfer is costly and exaggerated
• Affordability - high costs squeeze provision of core services
• Value for Money is contested and rarely established
• State subsidies/guarantees and corporate welfare required
• Lower cost of public investment option ignored
• Construction performance
• Private finance means public debt
• High transaction costs
• Growth of secondary market trading and offshore infrastructure funds
• Privatising the development process with the loss of public sector capability
• High cost of abandoned, buyout, bailout, terminated and major problem contracts
• Erosion of democratic accountability and transparency
• Contracts are poorly monitored and rarely reviewed
• Decline in jobs, terms and conditions
• Loss of flexibility in use of buildings and service provision
• Local economic, social and equality impacts
• Environmental sustainability
• Private investment interests increasingly dominate public infrastructure