PFI Projects Fails Value for Money Audit

There is a reasonable argument for outsourcing functions that are performed by the public sector to the businesses under the Private Financing Initiative. The logic is that the public sector in most countries is not so established to undertake routine repairs and maintenance work and therefore it is sensible to have outside corporations contracted for those tasks.

Oftentimes the private corporations present very competitive bids in the first instance and after the vigilance is reduced, begin to hike costs and engage in profit maximization at the expense of the tax payers. This report states that the national Audit Office of the UK found that there's an almost tenfold variation in the prices for carrying out certain tasks. This flagrant overcharging gives the idea of outsourcing and private public partnerships a bad name. Still, it appears that design of the system to ensure that the public gets value for money. Granted that the report appears to have highlighted the worst cases of abuse by contractors, even outsourcing and private contractors may game the system.