Over 400 PFI projects have been signed, with a capital value of more than £15 million each and a combined capital value over £42 billion. A further £5.3 billion of projects are in the final stage of negotiations with a preferred bidder. Current estimates of the government's payments for just the £42 billion of signed projects are £135 billion, over three times their capital value. (See table B)
PFI spans every government department, every service, central and local. Each sector is subject to a slightly different set of regulations and incentives, but the final approval for any PFI scheme comes from the national, government department. In addition, local authorities are given financial support towards the costs of PFI schemes, called PFI credits, which are administered by government departments. Trade union pressure has helped to force the government to allow local authorities to be able to borrow to invest, but with strict limitations that mean PFI remains an easier option.
Alongside PFI the UK government has introduced a range of other PPPs, some of which are described below. (Table A)
Table A. Examples of Types of PPPs in different sectors
Sector | Type of PPP | Services | Private finance | Staff transfer |
All sectors | PFI | Design, Build, Finance and multiple support services | Y | Y |
Local government | Strategic Service Delivery Partnerships (see above) | Multiple (see below) | Y | Y |
Schools | Building schools for the Future: | Construction plus multiple support services + possible future education policy | Y | Y |
Housing | ALMO :Arms Length Management Company with minority municipal ownership. | Housing repair, maintenance, management | Y | Y |
Hospitals | PFI
| Construction plus multiple, support services | Y | Y |
| PPPs in other services |
| Y | Y |
Primary health care | LIFT: Local Improvement Finance Trust- Non profit company with 60% private ownership and exclusive contract for all current and future development | Construction, maintenance plus multiple, support services | Y | Y |
Higher education | PFI | Construction plus multiple support services | Y | Y |
Roads | PFI | Construction and maintenance | Y | Y |
Central government | PFI and many types of PPP | Various | Y | Y |
Prisons | PFI | Construction plus all prison and support services | Y | Y |
The main types of Strategic Partnerships currently include:
• Support services eg Lincolnshire County Council - 10 year £306m contract. 1,088 staff transferred from finance, IT, personnel, property, payroll and catering.
• Environmental services eg London Borough of Westminster - 10 year £241m contract to oversee 67 council services involving 7 council directorates.
• Education eg London Borough of Waltham Forest - 5 year £200m contract for school development and review services, pupil and student support and core support services.
• Joint Venture Company eg London Borough of Lambeth - 10 year joint venture that externalises 17 direct service functions.