Committee of Public Accounts (PAC): committee appointed by the House of Commons to examine "the accounts showing the appropriation of the sums granted by Parliament to meet the public expenditure, and of such other accounts laid before Parliament as the Committee may think fit". It has 16 members and is always chaired by a member of the Opposition.
Contractors: the private sector consortiums and companies that deliver the private finance assets and services. Includes both the project company and its sub-contractors.
European System of Accounts 1995 (ESA 95): designed integrated system of economic statistics, based on the System of National Accounts 1993. National Accounts based on ESA 95 are used for international comparisons within the European Union.
Gilt: Government securities traded on the London Stock Exchange. They are called gilt edged as it is certain that the interest will be paid and they will be redeemed on the due date.
International Financial Reporting Standards (IFRS): standards used for the preparation and presentation of financial statements adopted by the International Accounting Standards Board.
Private finance: the funding raised by the private sector as part of a private finance project.
Private Finance Initiative (PFI): a particular form of PPP and private finance project, introduced by the Government in 1992 to harness private sector management and expertise in the delivery of public services, while reducing the impact of public borrowing involving.
Project Company: the financing of most PPP projects is obtained specifically for that project by a project company formed solely to fulfil the contractual obligations of the particular project. This type of company is often referred to as Special Purpose Vehicle (SPV) and is usually made up of different shareholders including a construction company and a facilities management company.
Public authority: the public body commissioning and managing the private finance project's contract.
Public-Private Partnership (PPP): a contractual partnership between bodies from the public and private sectors with dedicated governance structures to manage the relationship.
Refinancing: the process by which the terms of the funding which was put in place at the outset of a PFI contract, are later changed during the life of the contract, usually with the aim of creating refinancing benefits for the consortium company. Refinancing may be possible where the risk of a project has reduced due to, for example, the construction phase of a project being successfully completed.
Risk transfer: passing of risk from the public to the private sector party.
Senior debt: the debt that is ranked highest in terms of claims on project cash-flows and therefore carries the lowest risk that it will not be repaid.
UK GAAP: United Kingdom's Generally Accepted Accounting Practice.
Unitary charge: The payment from the public authority to the contractor in respect of the provision and operation of the asset.