The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

When ‘invisible’ debt turns ugly

The collapse of Carillion has raised perennial questions about PPP.


Euromoney wrote last year about the rise of invisible debt. Governments have been piling up contingent liabilities that they can keep off-balance sheet in order to hit budget targets, buoy credit ratings or simply hide the measure of overall indebtedness from the public eye. A popular example of this is the funding of infrastructure through public private partnerships.

The UK’s public-sector debt is estimated to be about £1.83 trillion. This represents one of the highest debt-to-GDP ratios among advanced economies. 

At 1.7% of GDP, the UK’s use of PPPs, which involve off-balance sheet debt and other contingent liabilities, is the third highest in Europe behind Portugal and Hungary, according to a recent report from the National Audit Office (NAO). 

The NAO calculates that the cost to the state of those contingent liabilities from existing Private Finance Initiative (PFI) commitments (part of the broader PPP procurement programme) with a capital value of £60 billion will be about £199 billion until 2040.

These are striking numbers. PPPs can be a useful way of directing capital to projects that require heavy investment long before there is any pay off. They enable risk to be allocated to public and private investors according to appetite, which can result in higher quality assets and increased operational efficiency.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree