3.7 There are two sponsoring departments that account for 376 operational PFI contracts. These are the Department of Health (with 209 contracts) and the Department for Education (167 contracts). In aggregate, these two departments sponsor over 55 per cent of the total number of PFI contracts in operation. The challenge for these departments is to stimulate the local bodies managing the contracts (NHS Trusts and local authorities) to engage with the savings initiative.
3.8 We highlight below the progress to date that the Department of Health and the Department for Education have made in reporting savings. The total reported signed savings to date by both departments since the start of the savings initiative is £63m, which is less than 0.1 per cent of the total remaining unitary charge of £93 billion. Both departments have projects that demonstrate that savings are possible, but given the value of their portfolios there is likely to be scope to make further savings.
In health:
• The Queen's Hospital in Romford was part of the Treasury's savings pilot in February 2011. This, and other exercises, identified savings in the health sector before the start of the current initiative of £113 million.
• The savings initiative has identified further signed savings of £61 million across a number of health projects (Figure 2), with a further £65 million (confidence-adjusted) of reported pipeline savings.
• The total reported signed savings of £174 million on health projects (including those reported prior to the start of the savings initiative) amounts to just one quarter of 1 per cent of the remaining unitary charge payments for operational PFI contracts in the health sector, which stands at over £69 billion (Figure 5).
In education:
• Signed savings of £3m were identified before the savings initiative started in July 2011. Signed savings since the savings initiative began are a further £2 million.
• There is currently £15 million of confidence-adjusted savings in the pipeline progressing towards being signed.
• The total reported signed savings of £5 million on education projects (including those reported prior to the start of the savings initiative) amounts to just two-hundredths of 1 per cent of the remaining unitary charge for operational contracts in the education sector, which stands at over £24 billion (Figure 5).