Questions over PFI
The Bank of England has cut interest rates by half a per cent to 1.5%. But will it make any difference to the general lack of credit? And apart from its obvious impact on individuals and businesses what difference might the credit crunch make to the way the Executive goes about its business?
Yesterday the Society section of the Guardian highlighted HSBC's decision to withdraw from the acute hospital project in Enniskillen as an example of the increasing doubts about funding public works through Private Finance Initiatives, or PFIs. In December the project received planning permission.
Before Christmas, the Public Service Trade Union, NIPSA published a report criticising the Executive's continued reliance on PFI as a means of building schools and hospitals.
The credit crunch has dried up many of the private sources of funding for PFI consortia. In addition, the NIPSA report predicted that a change in accounting practices due in April could make PFI much less attractive as the borrowing involved will have to be included on the public sector's balance sheet in the future.
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