Tanking PFI

I have blogged before on the idiocies of PFI - how Gordon Brown has a reputation for economic prudence given he facilitated this is beyond my ken - but the latest news is even more extraordinary. Not only are we paying more for our infrastructure than we should, but now the very future of an important project, the Airbus tanker project, is under threat. According to the FT:

The turmoil in credit markets has dealt a big blow to the UK government’s defence procurement programme, putting in jeopardy plans to help fund a new fleet of Airbus tankers for the Royal Air Force with a bond issue.

The issue is that the bonds financing this project were expected to be wrapped by Ambac. This is beyond crazy: in many instances either explicitly or implicitly (because the project cannot be allowed to fail) the government backstops PFI, so there is no need for a wrap. It is only the bizarre fiction of PFI that pretends that there is any risk transfer, and hence any need for an insurer to be involved. PFI is a waste of public funds on an extraordinary scale: it is time we held Gordon accountable for it.