The whole point of PFI, if you believe the hype, is to deliver public service by shifting the risk to the private sector and then have the Government simply rent back the delivered project for a specified length of time at a premium rate to reward the private consortium for taking the risk.
So, why is it that no one has yet mentioned in the press that three of the key financial backers in the private consortiums are HBOS, Abbey National and RBS? That's significant because they are all institutions that are now partly in 'public ownership' thanks to an injection fo £50 billion in recapitalisation.
That means that the Government is not only propping them up, but it is also paying them premium rent for projects it got them to build and rewarding them for taking a risk that it is itself now liable for. In fact, the Government is now paying the banks to take a risk which they are no longer taking because all the risk is back in the hands of the Government as a significant, powerful and influential shareholder.
We're not talking about small picking either, they are over 600 signed PFI agreements that the Government has made, and quite a few of them are backed by the banks that the Government has pushed itself to bankruptcy to hold up. Now put this in context with new accounting rules that will be introduced in April 2009 to make PFI be "on balance sheet". At this point, assuming the Government do it, the books will be laid open and potentially the economy will crash even further.
If at this point the scale of the debt is revealed formally, then there is every potential that the Government could default on its payments to the banks for PFI (both the ones it has part ownership of and the ones that it doesn't); if one of those banks was then to collapse, what would happen to the schools, hospitals, defence installations, transport projects and all other manner of PFIs that have been agreed?
Seems to me that we might not just have a "tax bombshell" coming but rather a "PFI bombshell" that could cripple the country in a way not seen for a generation.
UPDATE: The bringing of the PFI debt on to the balance sheet in April would be a very good reason to hold a snap election before the roof falls in. No?