The newly established government infrastructure advisory body has warned that ministers will need to “learn from past mistakes” if the revival of Private Finance Initiatives (PFI) is to be part of the upcoming infrastructure strategy.
Matthew Vickerstaff, Deputy CEO of the National Infrastructure and Services Transformation Authority (NISTA), told the Public Accounts Committee that issues with infrastructure built under previous PFI schemes — especially in schools — “still sound like a drumbeat.”
He highlighted numerous flaws, including poor acoustics, inadequate lighting, problems with fire doors, defects in refurbishing older buildings, and technical limitations that hinder full use of school facilities.
“We’re seeing the difficulties involved in urgently preparing schools to open in September. I can’t say exactly how many PFI-built schools have these issues, but it’s clear the private sector needs to be part of the solution,” he said.
Chancellor Rachel Reeves is expected to unveil a 10-year infrastructure strategy in June, potentially involving a new model of public-private financing — including projects in education and healthcare. This would mark the first major wave of PFI contracts since 2018, when former chancellor Philip Hammond halted them, calling the scheme “too complex and inflexible.”
While Vickerstaff expressed “mixed feelings” about a new generation of PFI, he acknowledged that modern contracts could be much more effective:
“Today, we have much better asset management systems, digital technology, and automated facilities maintenance. That could significantly improve the quality of new contracts, regardless of whether they’re delivered by the public or private sector.”
He also stressed the need for independent oversight during construction:
“The lesson we must learn is the importance of independent quality control. Many issues arose due to inadequate oversight, regardless of who financed the project.”
Meanwhile, a new PwC report urges the government to explore a fresh public-private partnership (PPP) model, including mutual investment models used in Wales.
“We’re seeing strong market interest in renewed forms of public-private financing, especially under tight fiscal conditions,” said Dan Whittle, Deputy Director of Corporate Finance at PwC. “There’s no need to reinvent the wheel — it’s about improving risk-sharing, contract management, and building real partnerships.”
As part of the “Funding the Future of Construction” initiative, the government is also considering new investment mechanisms for critical projects — from schools and hospitals to housing and prisons.
The final infrastructure development strategy is expected to be published alongside the spending review in June.