This paper is applicable to all bodies classified to the public sector by the Office for National Statistics ("ONS"), i.e. central government departments, their agencies and non-departmental public bodies, NHS Trusts and entities owned or controlled by NHS Trusts, local authorities and entities controlled by local authorities and any entities classified as public corporations.
The paper provides technical guidance on the classification of assets that underlie PFI and similar transactions in the system of National Accounts. The guidance contained within this paper is based on Part IV, 4.2 of the MGDD, "Long term contracts between government units and non-government partners (Public-private partnerships)". The MGDD is issued by the European statistical agency, Eurostat, and provides guidance on the application of ESA 95.
The detailed guidance in this paper is only directly applicable where transactions are characterised as being for the provision of "services purchased by government on the basis of dedicated assets", as defined within the MGDD. For practical purposes, any contract that is determined as being a service concession arrangement, such that the procuring authority must consider IFRIC 12 for the purposes of their financial statements, must also be considered under this guidance.
It is expected that the guidance will be applied to the majority of PFI and similar transactions. When considering more complex PFI type transactions any analysis will require the application of judgement, and care should be taken when applying the principles contained within this paper.
Note that certain types of transactions, specifically user-pays arrangements, are outside the direct scope of this guidance. The paper does not provide guidance on the National Accounts balance sheet classification of assets that underlie transactions that have been assessed as being leases under IFRS (i.e. in cases where the assessment does not start with the IFRIC 12 considerations the provisions of this paper do not apply). Further, this paper does not provide guidance on assessing the sector classification of an entity as either public or private sector, nor does it provide guidance on the application of other areas covered within the MGDD, for example on the treatment of securitisation operations. Section 3.1 sets out further details on scope.
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1 Further guidance on the types of transaction covered by this guidance is contained in Section 3.1
2 http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-BE-04-004/EN/KS-BE-04-004-EN.PDF