Spending watchdog the National Audit Office has called into question the way government departments and local authorities justify PFI.
Assistant auditor-general Jeremy Colman claimed the yardstick used to compare PFI with traditional public sector procurement was unreliable because the public sector figures did not stand up to examination.

Colman, speaking at an audit office PFI conference last month, said the sums used to calculate the public sector comparator, as the yardstick is known, were based on models that were prone to error, irrelevant, unrealistic or "pseudo-scientific mumbo jumbo".

Colman said too much emphasis was placed on public sector comparators, especially at a late stage in the procurement exercise when public procurement was not a realistic alternative.

He said: "It is obviously rational to examine forecasts of costs and alternatives – it is not rational to base your decision solely on costs." He said the PFI should be reappraised with more emphasis on risk transfer and length of deals.

Colman's comments came in a bad week for the initiative. A report by CABE claimed that PFI hospitals will be redundant in 20 years because of advances in healthcare building technology, and the schools PFI programme received a setback after West Dunbartonshire council rejected plans for a £70m deal.