A few months ago the (present) chancellor promised to revive the economy by spending billions on infrastructure projects, - roads, hospitals and schools, by bringing forward and commissioning projects which were due to start in a year or two.
Many of us were dubious about this, because of the length of time it takes to negotiate, appoint and build. The employment and incomes would not boost the economy for a couple of years at least
It seems that our doubts were right, but for another reason. The Times reports today that billions of pounds worth of schemes have already been delayed. The reason is finance. These would all have been built under Personal Finance Initiative, Gordon Brown's preferred option, because it is a "buy now, pay later" scheme, and which he can keep off the balance sheet - it will be a future government's problem.
PFI depends on private developers and contractors obtaining bank finance. The schemes have hit the same problem confronting would-be mortgage borrowers and firms seeking finance, - inadequate bank lending
Also this morning, this time in the Financial Times, is the report that major offshore wind-farm projects are in jeopardy. In this case the problem may be falling prices of gas, oil and carbon-dioxide permits. This is the case in 1,000MW wind Farm in the Thames estuary The problem for offshore generation is the higher cost of installation and maintenance, as compared with onshore turbines.
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