As governments outsource social housing is the private sector too strong?

[Longterminvestor]

While governments like to grab the headlines with their social housing projects the reality is that much of the work and management is now outsourced to the private sector. Has government backed social housing disappeared in all but name?

 

[nmb]

Yes - PFI schemes will come back to bite governments on the backside. It is too late to put the private sector monster back in the box - governments are very much dependant on private sector money now.

 

[Longterminvestor]

The PFI schemes have been a complete disaster from a financial point of view even if they have helped to provide new schools, hospitals, etc. The long-term cost is extortionate to say the least and all of this debt is held “off-balance-sheet” by the government.

 

[kchiggs]

Far better to just list the requirements say a hospital with x-beds,x-wards and let the private sector companies bid on it.

 

[nmb]

I read today that the difference between the cost of government backed finance and PFI transaction finance is around 40%. Staggering that any government would even consider this type of transaction! Then again, it is all off-balance-sheet and makes the “UK balance-sheet” look a lot better than it actually is. The same can be said of pension liabilities going forward.