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The government is set to launch a review of Private Finance Initiative (PFI) contracts in order to deliver construction projects at a lower cost.
Sir John Major first introduced PFI in 1992 to allow private firms to deliver public sector projects on time and budget. However, they have come in for criticism as long contracts have led to rising costs to the taxpayer.
Chancellor George Osborne has now revealed that the government will review the PFI in order to improve their cost-effectiveness and transparency.
"We have consistently voiced concerns about the misuse of PFI in the past and we have already taken steps to reduce costs and improve transparency," he said.
"But the review I have announced today will take this a step further with a fundamental reassessment of PFI."
It is estimated that there are currently 800 PFI contracts in operation with a capital value of approximately £64 billion. Private firms are due to be paid £267 billion over the next 50 years.
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