PFI has 'pivotal' economic role

Private Finance Initiative projects will have a "pivotal role to play in helping the UK economy to recover," according to Adrian Turner, a partner in the Eversheds law firm.

Turner was commenting on reports that the Government could have to bail out PFI projects for around £4bn in the next 18 months. He said: "If PFI is to play its full part in helping the UK economy to recover, in the short term the Government may need to provide further security to get credit flowing again, and in the longer term to return to a more steady state with competitive project finance terms delivering value for money for the public sector."

The law firm chief said PFI projects, with their reliance on private sector borrowing, were feeling the effects of the recession in the same way as everyone else.

Despite this, the picture was "not all doom and gloom." . There remained considerable private sector intertest in PFI. By delivering vital new infrastructure, such as schools, it would create much needed new jobs and opportunities in construction and other sectors of the economy.