Many PFI projects have been abandoned at the planning stage, which included some large projects such as the Paddington Basin Health Campus (2005), the University Hospitals of Leicester NHS Trust (2007) and the Colchester General Hospital (2006). These projects wrote off £14.9m, £23.m and £7.3m respectively in wasted planning, procurement and consultancy costs. PFI/PPP projects have been defined as 'abandoned' to avoid confusion with the World Bank's use of the term 'cancellation' for terminated PPP contracts.
Another example was the £1bn Armoured Vehicle Training Service project (2005). The Ministry of Defence paid £10.6m to bidders and £5.0m to consultants in the bid evaluation stage. However, it had no record of the expenditure on consultants in the earlier stages of the projects "…as records were not retained. The Department's own internal cost of resourcing this major procurement over the six years of the project was not recorded, as this was not a requirement" (National Audit Office, 2008). This reflects an appalling attitude and lax public management that is not unique to the MoD. It fails to treat staff time and resources as an opportunity cost as resources could have been used to develop another public service project or implement service improvements.
Table 9 excludes many PFI projects that were cancelled by the UK government in 2009/10 as part of austerity measures in response to the global financial crisis, for example, several Building Schools for the Future projects were cancelled or put on hold in July 2010.
The sixteen projects in Table 9 are a sample of 'abandoned' projects.
Table 9: Abandoned PFI/PPP projects in the UK
Year | Department or Authority | Project | Reason for Cancellation | Cancellation cost (£m) |
2003 | East Kent Hospitals NHS Trust | East Kent Hospital | £250m capital cost, cancelled after 2 years (DoH evidence to PAC 2007) | 0.4 |
2004 | Bradford Teaching Hospitals NHS Foundation Trust | Bradford Hospital | £116m project cancelled after 3 years work. (DoH evidence to PAC 2007) | 0.7 |
March 2004 | London Borough of Camden
| Maiden Lane estate | Tenants vote by large majority to reject PFI (Hodkinson, 2011) | 0.3 estimate |
September 2004 | Ministry of Defence | Airfield Support Services PFI Project | Contract notice Sept. 2001 for £1.5bn project but cancelled 3.5 years later (NAO, 2008) | 1.0 estimate |
May 2005 | Royal Brompton and Harefield NHS Trust, St Mary's NHS Trust, Imperial College and Partnerships UK | Paddington Health Campus, London | Capital costs soared from £300m (OBC, 2000) to £894m and extra 7 years to complete. Cancelled on grounds of affordability, land and strategic issues (NAO, 2006) | 14.9 |
June 2005 | Ministry of Defence | Armoured Vehicle Training Service | Contract Notice October 1999, preferred bidder appointed June 2004, but failure to reach agreement (NAO, 2008) | 18.5 excludes six years of internal costs & consultants costs prior to 2000 |
June 2005 | Plymouth Hospitals NHS Trust | Derriford PFI Hospital | £300m project but 2 of 3 bidders withdrew. Cancelled on grounds of value for money risk and precedent of 1 bidder (PPP Bulletin, 11/09/09) | 1.0 estimate |
November 2006 | Ministry of Defence | Combined Aerial Target Service (CATS) | 3 bidders shortlisted September 2001, QinetiQ, privatised unit of Defence Evaluation & Research Agency in 2003 was one of bidders and launched its bid in 2003, appointed preferred bidder in March 2006 & awarded £365m contract December 2006. PFI replaced by 'contractor owned and operated service' in 2005-06 (NAO, 2007b, PAC, 2008 & Defence Industry Daily (2008). | 5.0 estimate |
November 2005 | Whipps Cross NHS Trust | Whipps Cross Hospital PFI | £350m redevelopment, Balfour Beatty consortia withdrew leaving one bidder (PPP Bulletin 10/09/07) | 3.5 estimate |
June 2006 | Essex Rivers NHS Trust | Colchester General Hospital | £186m capital cost project in procurement after VfM review (DoH evidence to PAC 2007). | 7.3 included compensation to Amec plc led consortia |
2007 | University Hospitals of Leicester NHS Trust | Leicester Hospital | Preferred bidder appointed 2004 but costs rose by £210m to £921m (Building, 20/07/07) | 23.4 |
2007 | Scottish Executive | Low Moss Prison, Bishopbriggs, near Glasgow | PFI project cancelled and new public 700-cell prison operated by Scottish Prison Service. (Financial Times, 24/08/2007) | 0.2 estimate |
2009 | Kent County Council | Agreed to participate in November 2004 but later withdrew because of affordability issues (PPP Bulletin, 2008) | 0.2 estimate | |
2007 | Wiltshire Primary Care Trust | £85m LIFT project | Cancelled after three bidders shortlisted on value for money grounds (Wiltshire Council, South Wiltshire Core Strategy, 2009) | 0.5 estimate |
October 2010 | Ministry of Defence | Defence Training Rationalisation project | Metrix Consortium appointed preferred bidder January 2007 for £14bn project, cancelled as bidder unable to deliver affordable proposal (MoD, 2010; PAC, 2010) | 32.4 |
December 2013 | Bradford City Council and Calderdale MBC | Bowling Back Lane Energy from Waste Incinerator - capital cost £181m | Govt withdrew £62.1m funding after FCC Environment & Skanska appointed preferred bidders. Councils launched Judicial Review but Govt eventually agreed settlement (Letsrecycle.com, 2014) | Settlement not disclosed 5.0 estimate |
Total 16 |
|
|
| 114.3 |