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How to Have Your Cake and Eat It


  • James Cuthbert
  • Margaret Cuthbert


This article is about how the capital assets in private finance initiative (PFI) schemes are treated in government accounts. The article begins by describing how public sector obligations in relation to the capital assets of PFI schemes are accounted for in the national accounts, and also, using different accounting standards, in departmental accounts. The article then considers the implications of information obtained using Freedom of Information on the way a sample of PFI schemes actually behave in practice. Analysis of this data suggests that the methods used in the national accounts, and in departmental accounts, seriously underestimate the true scale of PFI obligations. The data also indicates potential weaknesses with the risk-based test for assessing whether a PFI asset should come onto the public sector’s books in the national accounts – with the implication that many more PFI schemes should be brought on-book in the national accounts.

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  • James Cuthbert & Margaret Cuthbert, 2012. "How to Have Your Cake and Eat It," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 13(1), pages 53-64, January.
  • Handle: RePEc:wej:wldecn:506

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    References listed on IDEAS

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2010. "Growth in a Time of Debt," American Economic Review, American Economic Association, vol. 100(2), pages 573-578, May.
    2. Jamal Ibrahim Haidar, 2009. "The mark-to-market valuation and executive pay package regulations within the 2009 US (Bailout) Emergency Economic Stabilization Act," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 12(3), pages 189-199.
    3. World Bank, 2010. "Global Economic Prospects 2010 : Crisis, Finance, and Growth," World Bank Publications, The World Bank, number 2415.
    4. Haidar, Jamal Ibrahim, 2012. "Currency crisis transmission through international trade," Economic Modelling, Elsevier, vol. 29(2), pages 151-157.
    5. Haidar, Jamal Ibrahim, 2009. "Investor protections and economic growth," Economics Letters, Elsevier, vol. 103(1), pages 1-4, April.
    6. Brian Sturgess, 2010. "Greek Economic Statistics: A Decade of Deceit," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 11(2), pages 67-100, April.
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