Last week George Osborne announced that the government intends to cut back on Public Finance Initiative public procurement. PFI contracting, introduced by the Major government in the 1990s, grew apace under the Neo-Labs. Its attractions were obvious enough. Ministers responsible for public procurement in education, defence and health tend to find themselves under pressure to spend money in ways that deliver visible, short-term results, which has impeded capital investment in public infrastructure. PFI promised capital funding off the public balance sheet, with lots of new schools and hospitals to be paid for later. There was also the idea, which now looks ever more quaint, that for-profit businesses would bring market rigour to public works.

