4th June 2026
Labour says it wants to build new towns. But if Rachel Reeves funds them through PFI-style private finance, those towns could be financially crippled from the start.
PFI was sold as a clever way to build public infrastructure without increasing government borrowing. In reality, it was a fiscal illusion. The state still paid, but paid far more than it needed to. Schools, hospitals and many other public assets were locked into contracts in which every repair, alteration and service had to go through private contractors at inflated prices.
That is bad enough when it applies to one hospital or one school. Applied to whole new towns, it could be disastrous.
New towns need roads, drainage, schools, health centres, public spaces and utilities. If those are all wrapped in private finance contracts, the people who live there will inherit the cost for generations.
This is not prudence. It is financial engineering, and it will have a very real human cost.