Accounting, regulation and profitability: The case of PFI hospital refinancing

Steve Toms, Matthias Beck, Darinka Asenova

Research output: Contribution to journalArticlepeer-review


The refinancing of PFI (Private Finance Initiative) projects represents one of the most contentious aspects of Public Private Partnerships (PPPs) in the UK. The negative publicity associated with UK PFI refinancing deals is associated with several factors, including, evidence of massive private sector profit making, the failure of private sector financiers to share refinancing profits and, lastly, private sector frustration of adequate regulatory intervention in this area. Utilising a dynamic model of capital market and state interaction, this paper explains these outcomes as a function of effective private sector lobbying of bureaucratic state agencies to alter the structure of accounting, accountability and regulation with the goal of securing favourable profit and risk outcomes. These dynamics are illustrated with reference to the history of UK PFI refinancing and a case study of one of the projects where these gains reached extreme levels.
Original languageEnglish
Pages (from-to)668-681
Number of pages23
JournalCritical Perspectives on Accounting
Issue number7
Early online date12 Sept 2011
Publication statusPublished - Oct 2011

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