Allyson Pollock says PFI's were misleadingly introduced to the public as "philanthropic capitalism"

Across the world, public infrastructure projects like roads, hospitals and schools have traditionally been financed through taxation or government borrowing.

But in 1990, John Major's government in the UK introduced a new way of funding public investment, referred to as the Private Finance Initiatives (PFI).

In exchange for raising the money and building the project, the private sector would be paid an annual fee from the government for those services.

In return, the taxpayer is supposed to receive better value for money and service delivery by private sector efficiency.

Hospitals have traditionally been financed through taxation or government borrowing

These initiatives have escalated rapidly under the current British administration.

But can these big projects really transfer work to the private sector, as the UK treasury insists? And are they really better value for money to the UK taxpayer?

Private corporations have to borrow at a higher rate than the UK government, so what does the taxpayer get in exchange for the additional cost of financing? Is the public sector being taken for a ride?

Analyst Max Keiser reports.

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This episode of People & Power aired from Sunday, March 16, 2008 at the following times GMT:

Sunday: 14:30
Monday: 01:30 and 13:30
Tuesday: 06:30 and 20:30