Chris

Yes, government expenditure is cheaper in the long run, but the purpose of getting a loan and then paying it off (which is sort-of what infrastructure PFI and railway ROSCOs is) is that you get all the money you need up-front, the financial risk of the project is shared (in theory at least) and the cost in any given year is smaller. A lot more infrastructure has been built, much more quickly, over the past 20 years using this method than would have been reasonably possible under direct government funding and ownership (in Scotland, for example, the vast majority of high school buildings in the country are under about 20 years old. They have all been rebuilt using private finance. The long-term financial cost of this may be higher, but the direct owning/operating cost would not be nearly low enough for a building programme on that scale to be attempted.)