Abstract

In November 1992, the Conservative government in Britain introduced the Private Finance Initiative (PFI). This was designed to encourage partnerships between the public and private sectors and, in doing so, to raise capital for new developments without the funds appearing on the government's balance sheet. Allied to the provision of capital, however, was the expectation that the private sector would be involved in managing and operating certain services.

Initially, the PFI was applied to projects such as bridges, roads and prisons. It was not applied to the health sector until, early in 1994, Royal Brompton Hospital in London decided to explore this option. As the first hospital to do so, it broke ground for others who have followed. The experience demonstrates the difficulties of being first out of the gate, as well as the problems in reconciling the needs and expectations of the private sector with those of the health sector, including the need to secure approvals at multiple levels within the National Health Service.