Q6a-How should future payments by the Government under existing Private Finance contracts be recorded in public sector accounts?

16. As the public sector enters into Private Finance contracts it takes on liabilities. We believe these liabilities should be transparent. Our view is that Private Finance should be used for vfm reasons, not reasons related to recording them in public sector accounts.

17. The recent adoption of International Financial Reporting Standards (IFRS) as the basis of accounting for PFI projects has resulted in the majority of infrastructure assets procured under PFI being brought on to resource account balance sheets, together with the related liabilities.

18. This is not matched at national accounts level where the European System of Accounts 1995 (ESA 95) and Part IV of the Manual on Government Deficit and Debt 1 (MGDD) apply, resulting in liabilities being excluded from measures of net debt.