The chancellor pledged to end the use of private finance initiatives (PFI) which he described as a "classic Labour solution; pouring good money after bad."
PFIs are a method the government has used to finance new public infrastructure without having to raise the money itself.
Instead, it commissions the contractor to deliver the project and the state then pays the builder (or a separate company that buys out the contract) regularly to effectively lease the building or piece of infrastructure over several decades.
"I have never signed off a PFI contract, and I can confirm today that I never will," Mr Hammond told the House of Commons in his Budget speech on Monday.
A centre of excellence will be established to manage current contracts, which will be honoured, the chancellor said.
Michael Wistow, partner at law firm White & Case, said: “To abolish the use of PFI completely is a blunt instrument.
"Yes there were some that weren’t value for money but to effectively say they are all bad regardless of how they were structured isn’t correct.”
PFIs were thrown into the spotlight earlier this year this year when construction firm Carillion collapsed, putting thousands of jobs at risk.
The firm’s most recent annual report before it went bust showed that it received around £253m in 2016 from various UK public private partnerships, mainly made up of PFIs.
