NHS capital expenditure and the private finance initiative - Expansion or contraction?

The private finance initiative is a method of financing, not of funding. It allows the government to defer public spending - albeit at much higher cost. Capital charges created a method of paying for private sector financing by using the revenue budget. The use of land sales and capital charges to fund investment means that local affordability, not national priorities, determines investment. The high costs of private sector financing have increased affordability problems at national and local level. The increased costs of the private finance initiative are being met from hospital closure programmes, reductions in services and capacity, subsidies from the Treasury, NHS block capital allocations, and trusts' operational budgets. The private finance initiative transfers ownership and responsibility for providing services from the public to the private sector.