4.7 Public bodies, with the appropriate skills and capacity to do so, have taken services back inhouse. Transport for London (TfL) is responsible for the three largest reported savings to Treasury. TfL has good commercial skills, and a well-resourced commercial team that has actively evaluated options to change the ownership of PFI deals after construction and during operation.
4.8 TfL's savings are the result of bringing operational management inhouse by removing the private sector from a management role. TfL's prudential borrowing powers mean it has the flexibility in some cases to replace private sector capital with public borrowing where this is cost-effective. On two PFI contracts, TfL removed the financing companies associated with the contracts and dealt directly with key suppliers on substantially unchanged terms. This generated savings on financing costs (arising from lower debt repayments and the removal of future equity returns).