Jurisdiction(s):
United Kingdom

Key definition

PFI definition

What does PFI mean? PFI (private finance initiative) describes, in practice, a long‑term public–private partnership under which a private sector special purpose vehicle (SPV) finances and operates, and usually designs and constructs, public sector assets or services. The public authority pays a performance‑linked unitary charge over the term. PFI is not a statutory definition but a policy and market label; the legal framework is found in the project agreement and related documents, HM Treasury guidance (including SoPC4), and public procurement law. Key features include limited‑recourse project finance, transfer of design, construction, lifecycle and maintenance risk to the private sector, availability‑based payment and deductions,...

UK PPPs post-PFI/PF2: policy end for new projects, devolved procurement models (NPD/DBFM/MIM), exit planning for legacy contracts, and post-COVID infrastructure investment, with global developments

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Practice notes

Public–private partnerships (PPPs) remain an important element of UK infrastructure delivery, making up around 12% of public sector assets. Nevertheless, their application to new projects has declined sharply. In the 2018 Budget, presented on 29 October 2018, the government announced that PF2 would no longer be used for new projects (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). The National Infrastructure Strategy of November 2020 also confirmed that the PFI/PF2 model will not be reintroduced for forthcoming infrastructure schemes. That said, existing PFI and PF2 arrangements will continue, and given the typical length of these projects, they are expected to run for many years to come...

The Original Private Finance Initiative Model

The PPP form known as the Private Finance Initiative (PFI), widely adopted and promoted by the UK Government from 1997 onwards, saw a rapid fall in use for new projects from about 2012...

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Mathias Cheung

Atkin Chambers

Mathias Cheung is a barrister at Atkin Chambers. He specialises in commercial and construction dispute resolution, including litigation, adjudication and international arbitration. Mathias has acted in a complex TCC dispute regarding the redevelopment of the Rolls Building, and has appeared successfully as junior counsel in Vinci Construction UK Ltd v Beumer Group UK Ltd [2018] EWHC 1874 (TCC). He also appears regularly as sole counsel in the TCC, most recently in DSVG Facades Ltd v Conneely Facades Ltd and McDonald & Anor v D&F Contracts Ltd [2018] EWHC 1600 (TCC).Mathias has extensive experience advising on disputes and adjudications concerning PFI hospital and school projects, which typically involve complex contractual issues in relation to service failures, payment deductions, insolvency and termination. As a native of Hong Kong, Mathias is fluent in both Cantonese and Mandarin. He has recently acted as junior counsel in a...

Web page updated on 22/05/2026

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