Government borrowing. It turns out a lot cheaper in the end.
I agree.
However, coz of FPTP / two party / tribal nature of UK politics, that option is fraught with peril, especially for Labour.
Why?
One of Labour's fundamentals is public investment in infrastructure.
Tories, very much less so. So they don't have the problem to deal with.
Basically, Tories let it crumble ("saving" money - "We are the party of fiscal responsibility!"-type crap), knowing that Labour will have to pick up the poisoned chalice of fixing it.
The financing of which the Tories then use as a stick to beat them with - "They've increased the debt! They've put up your taxes! We are the party of fiscal responsibility!"
How to fund it?
Taxation - Tories go on the attack, and the electorate fall for the "Labour are the tax and spend party!"
Borrowing - Tories go on the attack, and the electorate fall for the "Labour just grow the national debt!"
Given the parless state that the Tories left schools and hospitals in, Labour had to do something to rebuild, while avoiding the traps above.
PFI was a solution.
PFI is crap, but it is only countenanced because enough of the electorate are the way they are i.e. tribal, stupid, deluded, childish.