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PFI/PF2


The Private Finance Initiative, or PFI as it is more usually known, is a public private partnership (PPP) model that was introduced in 1992 by the Conservative government to procure and deliver public infrastructure and services by engaging the private sector in the design, build, finance and operation of them. It was used across a variety of sectors, including for the procurement of schools, hospitals, defence projects, prisons, roads and social housing. It was succeeded by Private Finance 2, usually referred to as ‘PF2’. See Practice Note: Introduction to PFI and PF2.

In the 2018 Budget (delivered on 29 October 2018), it was announced that the government will no longer use PF2 on new projects (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). However, existing PFI and PF2 projects will continue to run, and given the typical lifespan of such projects this is likely to be for many years.

For a glossary of common PFI and PPP terms, see: PFI/PPP terms (Glossary).

Parties

There

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