UK Construction and Law
No return to PFI, but more public private partnerships where they pay, the Treasury tells peers
By Staff Writer | 8 September 2026
Answering a Lords question on 7 September, the Government said public private partnerships will be used beyond neighbourhood health centres and public estate decarbonisation only where they serve the Exchequer, that the National Wealth Fund holds 27.8 billion pounds and is meant to release 100 billion pounds over five years, and that the ten year infrastructure strategy commits some 725 billion pounds.
The question was tabled by Lord Brooke of Alverthorpe and answered by Lord Wilson of Sedgefield, a Government whip, on the afternoon of the Chancellor's growth speech. It is the fullest statement on the record since the 2025 Budget of where private finance for public buildings now stands.
The Government's position
The minister said the ten year infrastructure strategy sets out the Government's approach to private finance and the circumstances in which public private partnerships are considered, that the 2025 Budget made them available for neighbourhood health centres and for projects decarbonising the public sector estate, and that the model for each project will be chosen for value for money under the oversight of the National Infrastructure and Service Transformation Authority. Asked by Baroness Neville-Rolfe whether partnerships would extend beyond health and decarbonisation, he said the Government would always look at them more widely, but only where it is in the interest of the taxpayer and the Exchequer, and that regional mayors are being brought in through the National Wealth Fund.
There is no possibility that we are going to go back to PFI, as I said. We have learned the lessons from that.
Lord Wilson of Sedgefield, Lord in Waiting (Government Whip), House of Lords, 7 September 2026
He told Baroness Kramer, who described many PFI and PPP deals as poorly negotiated and motivated by keeping debt off the books, that she had the wrong end of the stick: the Government will not go back to the PFI contract system, which he said came to an end in about 2018, but will learn its lessons on contract flexibility, investment and transparency, and he credited PFI with schools, hospitals and surgeries where it worked. He declined to put a figure on outstanding hospital PFI liabilities, saying he was not sure of the total.
The figures given
The National Wealth Fund has 27.8 billion pounds and is intended to release 100 billion pounds of investment over five years. The ten year infrastructure strategy involves some 725 billion pounds over the decade, about 72 billion pounds a year, some of which the minister said will end up in public private partnerships. There are to be 250 neighbourhood health centres, 120 of them by 2030 and all 250 by 2035.
Lord Redwood asked the Government to speed up the identification of projects and the granting of permissions and to make sure enough risk is transferred to protect taxpayers; the minister pointed him to the Chancellor's speech that morning on stripping back regulation. Lord Hunt of Kings Heath said that where PFI went wrong it was usually because the public side lacked the expertise to negotiate, and asked whether a large expansion of partnership capital spending should now be expected; the answer was that partnerships will be deployed where they are in the interest of the Exchequer and the public. Lord Howell of Guildford listed France, Germany, Norway, Sweden, Finland, Canada, Australia, South Korea and Japan as countries adopting risk allocation systems built on PFI and asked what the Government is doing; the minister said it is learning from those jurisdictions.
For contractors and funders the message is narrower than the headline. Two programmes are open to partnership finance now, health centres and estate decarbonisation. Anything else must clear a value for money test project by project, with the authority that runs the pipeline as the judge. The 100 billion pound target is for investment the fund crowds in, not money it holds.