Nobody can handle the truth about PFI

A parliamentary spending watchdog put out a report last week on the private finance initiative, the nifty trick the government has used to build hundreds of gleaming new schools and hospitals. And once again the British public were treated to the bi-annual spectacle of two competing ideologies beating each other around the head.

"Private sector rip off!" scream the auditors. "Private sector efficiency," retorts the government. After half a day of this, everyone shuts up about it again for another six months, and the battle lines don't moved an inch.

Any deeper discussion of the merits, or otherwise, of PFI is rapidly abandoned, on the not-unreasonable grounds that it is a) complex and b) boring. This is a shame. Because the most frightening thing about it - more frightening than the headlines about

£300 lightbulbs, or flea-infested schools - is something that's barely mentioned. After 15 years and £57bn spent, nobody actually knows if it works. Not industry. Not the government.

And what's worse, no one seems that bothered about finding out.

Let's start with the basics. PFI is an arrangement whereby private companies build, finance and manage a government asset such as a school. The borrowing costs are higher than traditional public works, because the money isn't government-guaranteed.

But, the argument runs, because the construction companies are the ones taking the financial risk, they'll make damned sure the project is completed quickly and to budget. This, it was hoped, would put an end to embarrassing fiascos like the Scottish Parliament building, which trundled in three years late and at 10 times the predicted cost.

Officials will tell you, correctly, that PFI has been very successful at making sure new buildings don't cost more than was budgeted. What they can't tell you, because they