As a member of the EU, the UK has certain obligations to report the activity of the public sector as measured under ESA 95 for Excessive Deficit Procedure purposes. Specifically, the Maastricht Treaty requires that EU member states maintain their general government deficit (defined as the difference between receipts and expenditures) and general government gross debt (defined as the stock of outstanding liabilities) within certain limits relative to their GDP.
In addition to its obligations under EU Treaty, the UK sets its domestic fiscal policy (i.e. the way in which the levels of public expenditure, taxes, borrowing and debt are managed) with reference to measures based on the National Accounts framework. Specifically, UK fiscal policy targets certain balances and aggregates thereof that are derived from the National Accounts and published in the PSF.
Accordingly, when considering PFI and similar transactions, public sector entities need to be mindful of the impact of their transactions on the reported fiscal position, as measured with reference to the National Accounts under the provisions of ESA 95. Further, HM Treasury needs to ensure that the budgets allocated to and reported against by public sector entities reflect the impact of PFI and similar transactions on the National Accounts.