RBS chairman: PFI has been a fraud

Royal Bank of Scotland chairman Howard Davies has called the private finance initiative a “fraud on the people”.

Asked about the demise of construction giant Carillion on BBC One’s Question Time, Mr Davies questioned the point of handing over big projects to private firms, whose borrowing costs would be higher than the government.

“What is the advantage of doing that, unless you’re absolutely certain that they’re going to be much more efficient?” he asked.

“If you think they’re going to be efficient, why don’t you give them a fixed-price contract, why hand over the whole thing?”

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