Table 13: Major problems in PFI/PPP projects
| Date Financial close of contract | Project | New public costs (£m) | Total cost of project based on unitary payments (£m) | Capital cost (£m) |
| 03/11/1997 | Cumberland Infirmary, North Cumbria University NHS Trust, Carlisle Health Management Carlisle Ltd. Amec Construction. Amec sold 50% of SPV equity to Land Securities Trillium (now Semperian) in July 2007; Interserve sold 25% to Dalmore Capital Fund in October 2012; Interserve sold 25% to Interserve Pension Fund January 2013; Semperian sold 50% to Dalmore Capital Fund July 2013. Now Dalmore Capital Fund 75% and Interserve plc 25% | n/a | 619.2 | 66.7 |
| Comprehensive and widespread fire safety and fire proofing failings are estimated to cost £14.0m to remedy. A Trust statement 3 July 2015 said: "The PFI partner has not given any confidence that all the appropriate actions are being taken and the Trust has had to take action. "The PFI contract has crippled the Trust financially yet the building in which patients are being cared for is sub-standard. We must take action to terminate the PFI contract as we have done elsewhere in the country. This would allow us to take control of the hospital's estates management rather than being caught up in legal negotiations which are preventing us making progress." An independent Fire Safety report commissioned by the Trust found: 1. Inappropriate fire proofing materials which did not meet the required 30 and 60 minute protection standard to allow for safe evacuation or to prevent any fire from spreading in the building. 2. Inappropriate 'compartmentalisation' of the building, which would not restrict the movement of smoke and flames in the event of a fire. 3. A defective fire alarm system - the Trust is currently using a 'human detection system' with staff patrolling the hospital 24/7 due to faults with the current electrical system. The Trust trained 133 Fire wardens and 2,936 staff received enhanced evacuation training, 113 ward managers/matrons had role-specific training and 24/7 Floor walkers patrol the hospital during fire alarm testing. http://www.ncuh.nhs.uk/about-us/trust-board/2015/november/enclosure-7-fire-safety-plan.pdf The report highlighted deficiencies in the hospital's original construction, made worse by a poor standard of subsequent work. Cumbria Fire & Rescue issued a Fire Enforcement Notice in July 2015. I was withdrawn on 21 October 2015 but they continue to monitor the situation. The Trust forecast a £63.2m deficit for 2016-17. | ||||
| 1995 | National Insurance NIRS 2 Accenture | 89.0 | 134.0 | n/a |
| 9-year PFI contract started 1995 for new national Insurance recording system - NIRS2, renegotiated 1996, extended 2000 re new legislation. 172,000 cases of underpayment of pensions, which required over £43m in compensation payments and delays. Original contract £45.0m plus software increasing total to £76m. The contract was extended to accommodate changes in legislation and reorganisation for £70m - £144m. https://www.nao.org.uk/wp-content/uploads/2001/11/0102355.pdf | ||||
| 01/12/1998 | LIBRA Information System, Magistrates Courts Fujitsu and STL | 303.0 | 184.0 | n/a |
| LIBRA information system now over three times original cost of £146m to £487m (August 2006). ICL (now Fujitsu) only bidder and increased price 25% in preferred bidder stage in 1998 (PPP/PFI contract). ICL financial difficulties so provide only infrastructure and separate software contract with STL. Long delays. https://www.nao.org.uk/wp-content/uploads/2003/01/0203327.pdf https://www.nao.org.uk/wp-content/uploads/2006/05/05061049.pdf The Head of the NAO 'disclaimed' his audit opinion on the HM Courts Service accounts ending 31 March 2011, primarily for lack of information. The collection of outstanding fines and penalties increased 27% to £1.9bn in 2011. https://www.nao.org.uk/wp-content/uploads/2011/12/HMCS_Trust_statement_2011.pdf | ||||
| 06/05/1999 | Dalmuir Sewerage Treatment Works, Clydebank, Scotland Barr Construction, Taylor Woodrow, SAUR, Halcrow | 30.0 | 245.2 | 32.2 |
| Contract signed March 1999. In 2008 the Scottish Water board was told that the PFI plants were a "reputational risk". Dalmuir had significant pollution breaches, inadequate works, bad smells, weak penalty regime. Dalmuir plant was said to suffer from "the combination of an inherent compliance problem due to the inadequacy of the works from a size and process perspective, an operator which is losing £1 million per annum and a weak contractual penalty regime" (Edwards). In order to try and combat Dalmuir's problems, Scottish Water has been granted an extra £30 million by the Water Industry Commissioner for Scotland. "Scottish Water said it wanted "to exploit any opportunities" to restructure or buy out PFI contracts between 2010 and 2014. But this was knocked back by the government regulator, the Water Industry Commission for Scotland, as unaffordable in the current financial climate" (Edwards, 2011). http://www.robedwards.com/2011/03/exposed-the-pfi-sewage-scandal.html | ||||
| 29/03/1999 | Almond Valley Seafield & Esk Waste project, Scotland Saur UK Ltd | 10.0 | 778.8 | 105.0 |
| 31-year contract. In 2006 Statutory Code of Practice on Sewage Nuisance, Assessment and Control of Odour required PFI company and Scottish Water to produce improvement plan. PFI company liable for £6.0m and Scottish Water £10.0 of works. A failed pump led to 170,000 tonnes of raw sewage being discharged into the Firth of Forth in April 2007. http://www.robedwards.com/2011/03/exposed-the-pfi-sewage-scandal.html http://www.theguardian.com/guardian/2007/apr/23/frontpagenews.pollution | ||||
| 01/12/2001 | Crown Prosecution Service LogicaCMG | 168.0 | 240.0 | n/a |
| PPP/PFI 10-year contract signed 2001 for a case management system, but estimated outturn cost was £408m (70% increase) due to "improved service levels' and extended to more staff. House of Commons Written Answer, 20 July 2006, Col. 583W, Solicitor-General to Christopher Huhne, MP http://www.european-services-strategy.org.uk/publications/essu-research-reports/essu-research-report-no-3-cost-overruns-delays/essu-research-paper-3.pdf | ||||
| 01/02/1998 | Lord Chancellors Department and Court Service - ARAMIS Liberata 9 year contract for a resource accounting and management information system | 50.0 em | 130.0 | 39.5 |
| Contract extended to 13 years. Contract extension not included in contract figures. PPP/PFI project - £50m cost increase (up 38%) and long delays https://www.nao.org.uk/wp-content/uploads/2003/01/0203327.pdf https://www.nao.org.uk/wp-content/uploads/2010/07/1011187.pdf | ||||
| 01/03/2001 | Northern Ireland New Vehicle Testing Facilities Contractor not disclosed, 15-year PFI contract. | 1.8 | 54.0 | 16.5 |
| Preferred bid of £18.8m April 1998 for 15 year contract, renegotiations, new IT subcontractor, contract cost increases and eventually signed March 2001. History of poor performance. An 18 minute test time not achieved, two centres had to be closed at any one time, waiting times for tests increased from 20 calendar days to 55 calendar days in 2004-05. £1.8m additional cost for overtime working in 2002/03 and 2004/05. http://www.niauditoffice.gov.uk/the_pfi_contract_for_ni_new_vehicle_testing_facilities.pdf http://www.niauditoffice.gov.uk/future_impact_of_borrowing.pdf | ||||
| 26/07/2001 | National Air Traffic Services (NATS) PPP and privatisation Airline Group | 758.0 | n/a | n/a |
| Consortium of 7 UK-based airlines given operational control and 46% stake. "The maximisation of sale proceeds seems to have taken precedence over the financial robustness of NATS" (House of Commons Public Accounts Committee, 2003). NATS debt increased from £333m to £733m as the Government took £758m out of the company. Refinancing and restructuring required after downturn in traffic following 11 September 2001. UK government subscribed £5m of share capital and £60m loans and BAA plc joined the PPP on the same terms. Government stake reduced to 48.8%. Privatisation receipt less public sector costs of £33.6m in 2001 and 2003 and £65.0m investment in 2003. https://www.nao.org.uk/wp-content/uploads/2004/01/0304157.pdf http://www.publications.parliament.uk/pa/cm200203/cmselect/cmpubacc/80/80.pdf Shaoul, J. (2003) A Financial Analysis of the National Air Traffic Services PPP, Public Money & Management, July. | ||||
| 07/03/2002 -20/07/2008 | Brighton & Hove Council, Comart Media and Arts School Jarvis plc | 4.5 | 92.4 | 24.8 |
| Council reported quality of work on four schools 'unacceptable' and long delays in completing construction. Comart school had a series of major difficulties. "A council scrutiny committee report published in May criticised the local authority's gamble to include Comart in the PFI contract, saying senior officials knew there was a 50 per cent chance it would be forced to close." https://www.tes.com/article.aspx?storycode=2153580 The Council agreed to remove facilities management services from the PFI contract in March 2010. http://present.brighton-hove.gov.uk/Published/C00000149/M00002696/AI00013337/$Item46RemovalofSoftServicesfromtheSchoolsPFIContractPart1.docA.ps.pdf | ||||
| 01/05/2001 | Dudley Group of Hospitals, West Midlands Sir Robert McAlpine | 23.2 | 1,906.6 | 137.0 |
| Summit Healthcare (Sir Robert McAlpine, Interserve FM and Bank of Scotland) to redevelop and expand Acute Hospital. Additional refurbishment work required led to McAlpine suffering £100m losses. Firm sued NHS Trust for damages and received £23.2m in 2007. https://www.nao.org.uk/wp-content/uploads/2012/02/10121792.pdf (page 18) | ||||
| 01/12/2002 | East Lothian Schools, Scotland Ballast UK (Ballast Nedam) | n/a | 268.7 | 46.1 |
| Ballast UK went into administration in November 2003 whilst refurbishing 6 schools and community centre. Parent company withdrew funding. Unpaid sub-contractors went into liquidation. Long delay until replacement contractor agreed to takeover project. Ballast had 50% of project equity in the school project. PricewaterhouseCoopers (2003) The Value of PFI: Hanging in the balance (sheet), http://infrastructureaustralia.gov.au/policy-publications/publications/files/The_Value_of_PFI.pdf | ||||
| 28/03/2003 | Tyne and Wear Fire Stations Jarvis plc | n/a | 115.5 | 29.1 |
| Projects delayed when construction costs exceeded bid price. Company and PFI investors bore cost of £120m funding gap. Work stopped on all Jarvis's 14 PFI construction projects, because it was unable to pay subcontractors leading to long delays. https://www.nao.org.uk/wp-content/uploads/2012/02/10121792.pdf | ||||
| 08/10/2002 | Whittington Hospital, London The Whittington Hospital NHS Trust, 29 year contract Jarvis plc See above | n/a | 166.0 | 38.4 |
| Project severely delayed and a 6 month shut down of site at beginning of 2005. Stream of delays, numerous management team changes as Jarvis managers left the stricken company and escalating costs - Schofield Lothian brought in as project managers by SPV shareholders in January 2006. http://www.schofieldlothian.com/case_study/whittington-hospital-pfi-project/ http://www.building.co.uk/further-setback-at-hospital-delayed-by-jarvis-troubles/3061030.article Capital cost increased from £26.5m in FBC to £38.4m - a 44.9% increase. The Whittington Hospital Redevelopment: Full Business Case, 2002 | ||||
| 27/03/2001 | Wirral Grouped Schools PFI Scheme, Merseyside Wirral MBC - Jarvis plc, 30 year contract - See above | n/a | 319.6 | 68.2 |
| Report to Education and Cultural Services Select Committee, 20 April 2004 "In addition to the impact on schools described in this report, the difficulties and delay on the project have created considerable additional demands on the PFI team and support consultants and have led to delays in other non-PFI capital and premises works with schools." Update: 16 September 2004 http://democracy.wirral.gov.uk/ceListDocuments.aspx?CommitteeId=460&MeetingId=1355&RD=Minutes#36 | ||||
| 19/20/2003 | Lancaster University student accommodation Jarvis plc - See above | n/a | 339.0 | 124.0 |
| Construction and management of 3,405 student rooms in 38 year contract http://www.partnershipsbulletin.com/news/view/1171 Jarvis plc sold its equity in the project in 2004 to the Alma Mater Fund, jointly managed by the private equity firm 3i and Barclays Private Equity. Contract increased to 4,347 student rooms, £180m capital cost and 48 years: http://www.upp-ltd.com/portfolio/?s=lancaster-university | ||||
| 2000 | Department for Transport Siemens | n/a | 230.0 | n/a |
| 10 year PPP/PFI contract started 2000 for vehicle testing. MOT Computerisation contract renegotiated in April and July 2005 - increased support by contractor and greater control over performance by Vehicle and Operator Services Agency. Repeated delays and system crash in 2006. ZDNET.Co.Uk 27 April 2006 and ZDNET.Co.Uk 28 April 2006. | ||||
| 01/15/2000 | Foreign and Commonwealth Office (FCO) Global Crossing - acquired by Level 3 Communications Inc. in October 2011. | 60.3 | 319.8 | 73.9 |
| Provision of an FCO global telecommunications network, PFI contract. Costs increased by £60.3m and contract extended by 2 years. At the time the contract was awarded, Global Crossing's parent company was facing bankruptcy. The House of Commons Foreign Affairs Committee demanded to know why this was not disclosed and whether private firms had undertaken due diligence and if so whether there were grounds to take legal proceedings. The FCO had to prepare "…a detailed contingency plan to ensure no loss of FTN services in the UK or overseas should Global Crossing itself cease to be able to deliver the service" (FCO Annual Report 2003). At the time of procurement, the company had accumulated about US$7bn losses and a reputation for aggressive accounting and inflating revenue. Global Crossing filed for Chapter 11 bankruptcy protection in January 2002. http://www.wsj.com/articles/SB1012350107689277360 Corporate greed led to executives receiving salaries and lump sum pensions before bankruptcy, but redundancy payments to staff never arrive and the value of pensions plunged. (Frank Partnoy, Infectious Greed: How Deceit and Risk Corrupted the Financial Markets, 2003) Global Crossing emerged restructuring in December 2003 majority owned by Singapore Technologies Telemedia. | ||||
| 01/05/2000 | HM Treasury Customs & Excise Fujitsu | 429.0 | 500.0 | n/a |
| 10-year PFI contract started 2000 but costs rose to £929m by August 2003 (a 86% increase) due to additional requirements. Business Case benefits reduced from £4bn to £1.2bn in November 2003. In April 2006 the contract was merged into the Department's ASPIRE ICT contract. https://www.nao.org.uk/wp-content/uploads/2006/07/0506938.pdf http://www.publications.parliament.uk/pa/cm200304/cmselect/cmpubacc/138/138.pdf | ||||
| 06/03/2001 | Strategic Transfer of the Estate to the Private Sector (STEPS) HM Customs & Excise and the Inland Revenue Mapeley Group (Fortress Investment, Soros Real Estate and Delancey Estates). Fortress bought out Soros and Delancey in 2004 and floated Mapeley on London Stock Exchange in 2005 reducing its stake to 55%. | 213.0 | 4,200.0 | 370.0 |
| 20 year PFI contract in which both departments transferred the ownership and management of the their estates. Mapeley's bid was much lower than other bids and they immediately transferred freehold and long-leasehold properties to a company in Bermuda to avoid UK taxation of capital gains. Mapeley paid £220m for estate (574 buildings) plus further £150m over ten years. http://www.publications.parliament.uk/pa/cm200405/cmselect/cmpubacc/553/553.pdf STEPS contract eight years on: The contract was refinanced in 2006 with the government receiving 30% of the gain. There appears to be no evidence of the scale of tax evasion (NAO, 2009c). https://www.nao.org.uk/wp-content/uploads/2009/12/091030.pdf Managing the HMRC estate, NAO, January 2017. Whole life cost of contract £4.2bn, £213m more than originally forecast, para 2.7. "Performance deteriorated across a range of measures in 2013-14." "Mapeley's performance in 2014-15 remained below the quality standards HMRC had set out in its invitation to tender" (para 2.9). https://www.nao.org.uk/wp-content/uploads/2017/01/Managing-the-HMRC-Estates-Full-Report.pdf | ||||
| 2008 | Military Flying Training PPP contract, Ministry of Defence Ascent Flight Training - a joint venture between Lockheed Martin and Babcock International Group plc | n/a | 3,200.0 - 6,800.0 | n/a |
| 25-year PPP contract to provide flying training at five UK sites with new core training running by 2012 and full capacity by 2014. Long delays between 2008-12 with end of 2019 a new date for full capacity. Only 250 aircrew to start training each year instead of 480. Ascent paid £143.3m by March 2015 and failure to train will reduce overall cost. MoD also reduced aircrew training numbers after cuts to front-line squadrons. https://www.nao.org.uk/wp-content/uploads/2015/06/Military-Flying-Training.pdf Public Accounts Committee: Strategic financial management of the MoD flying training, December 2015 http://www.publications.parliament.uk/pa/cm201516/cmselect/cmpubacc/391/391.pdf | ||||
| 22/06/2004 | Glasgow Royal Infirmary, Scotland Multi-storey car park owned by Impregilo Parking (Salini Impreglio SpA, Italy) and operated by APCOA Parking UK (APCOA Parking AG, Germany) and contract renewed for further 10 years in 2014. | n/a | n/a | 12.1 |
| Hospital Car Parking Charges: Report of the Review Group, Scottish Executive, November 2007. www.gov.scot/Resource/Doc/924/0054983.doc Despite a Scottish Government policy decision to abolish hospital car parking charges at 14 NHS hospitals, they remain at three PFI hospitals - Edinburgh Royal Infirmary, Glasgow Royal Infirmary, and Ninewells Hospital in Dundee. Free parking saves patients over £25.0m since charges abolished 31 December 2008. Scottish Government Press Release 11 October 2015 http://news.scotland.gov.uk/News/Free-parking-saves-patients-over-25m-1e31.aspx The cost of terminating the three PFI contracts was considered to be "prohibitive" and three companies involved were not interested in negotiating such a deal. Glasgow Royal Infirmary Business Case: PPP Car Parking Project http://www.nhsggc.org.uk/media/224705/PPP%20Car%20Park%20Project%20At%20Glasgow%20Royal%20Infirmary.pdf Project Agreement http://www.nhsggc.org.uk/media/224707/Glasgow%20Royal%20Infirmary%20Project%20Agreement%20GGHB.pdf Current rates: £1.70 per hour http://www.apcoa.co.uk/parking-in/glasgow/glasgow-royal-infirmary.html Meanwhile NHS hospitals in England made £120.6m from parking charges in 2015-16, up 5% on the previous year. | ||||
| 1998 - | Ninewells Hospital, Dundee, Scotland 30-year PFI contract with Impregilo Parking, but they sold the contract to Vinci Park (Indigo), which controls parking on the entire hospital site. See Glasgow Royal Infirmary above | n/a | n/a | n/a |
| Nicola Sturgeon, then Scottish Health Secretary, was quoted as saying "In Tayside, the company that runs the car park at Ninewells has said it is not interested in negotiating an end to the contract" http://www.scotsman.com/news/sturgeon-ending-hospital-parking-charges-would-cost-tens-of-millions-1-752345 Rates from 1 November 2016: £2.20 in short-stay car park, annual staff permit is £416.40 https://www.thecourier.co.uk/fp/news/local/dundee/299656/ninewells-hospital-car-park-charges-increase/ | ||||
| 31/08/1998 | Royal Infirmary of Edinburgh, Scotland Balfour Beatty plc Part of redevelopment of hospital. Car Park contracted to Empark UK Ltd with 10-year contract since 2012. See Glasgow Royal Infirmary above. | n/a | 1,437.9 (overall hospital cost) (1) | 180.0 (overall hospital cost) (1) |
| Current rates: 0-1 hour £1.30, 5-6 hours £6.50 http://www.nhslothian.scot.nhs.uk/GoingToHospital/Travel/Pages/Parking.aspx | ||||
| 2001-2016 | Edinburgh Schools PPP 1 Edinburgh Schools Partnership (Amey Ventures, Amey Buildings, Amey Business Services, Project Management International Ltd, Miller Construction (now Galliford Try). 32-year contract for 17 schools | n/a | 531.3 | 129.0 |
| High winds blew a large section off an outer wall at Oxgangs Primary School in late January 2016. Inspections uncovered structural flaws in all PFI schools built in the city between 2002 and 2005, which led to their closure for several weeks. Children had to be transported to alternative facilities around Edinburgh. The City Council had to source buses from other parts of Scotland that met with seat belt and safety regulations. Emergency closure of PFI-built schools strands 9,000 Edinburgh pupils Further faults uncovered as 17 Edinburgh schools close over construction fears Tax haven firms cashing in on Scotland's PFI scandal http://www.heraldscotland.com/news/14448359.Revealed__the_tax_haven_firms_cashing_in_on_Scotland_s_PFI_scandal/ Equity in the Edinburgh Schools PPP 1 project was sold 13 times between 2003-2014 - see Table 10, p25, The financial commodification of public infrastructure: Report to Edinburgh Schools: Corporate Policy and Strategy Committee, 17 May 2016 http://www.edinburgh.gov.uk/meetings/meeting/3939/corporate_policy_and_strategy_committee | ||||
| 14/12/04 (financial close) | Central Manchester University Hospitals NHS Foundation Trust Catalyst Healthcare (Manchester) - Lend Lease Construction, Sodexo Lend Lease UK sold 50% stake to Lend Lease/PGGM joint venture (Netherlands Pension Fund) in October 2011 and Sodexo sold 15% stake to same joint venture in October 2013. | n/a | 3,281.2 | 512.0 |
| Defects in fire compartmentation discovered in a substantial part of Central Manchester University Hospital. Trust issued unavailability notices with £1.6m deductions in relation to Firestopping work. RNS 26 June 2015 http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/40CZ/12403694.html Moody's downgrades Catalyst Healthcare (Manchester) Financing plc's ratings, 29 June 2015 because fire compartmentation increases risk of project termination. Moody's restores original grading on 28 September 2015 on the basis that progress was being made in resolving dispute Unavailability deductions increased to £33m by April 2016, but disputed by Catalyst Healthcare. Settlement agreed - Trust deductions waived and released; contractor to pay sum of money to Trust; Trust will assume responsibility for and complete work on Firestopping defects and not issue further deductions relating to this work; Trust may have had legal basis to terminate contract but agreed not to do so in relation to Firestopping issue. RNS 28 April 2016 | ||||
| 26/09/07 (financial closure)
| Peterborough City Hospital Peterborough and Stamford Hospitals NHS Foundation Trust Brookfield Infrastructure Partners sold30% stake to John Laing Infrastructure Fund in April 2013. Macquarie has 21% and Peterborough Hospital Investments 49%. | n/a | 2,004.0 | 336.0 |
| A fire safety review is under way at Peterborough City Hospital after checks revealed issues with the ceiling voids, 5 December, 2014 http://www.peterboroughtoday.co.uk/news/health/investigation-under-way-into-fire-safety-at-peterborough-city-hospital-1-6456249 Peterborough City Hospital withholds £1.4m payment over fire scare, 27 February 2015 http://www.peterboroughtoday.co.uk/news/health/peterborough-city-hospital-withholds-1-4m-payment-over-fire-scare-1-6602849 London Stock Exchange Regulatory News Service 11/05/16, 09/06/16, 21/06/16 Moody's Ratings 05/03/15 https://www.moodys.com/research/Moodys-downgrades-Peterborough-Progress-Health-plcs-ratings-to-Baa3-from--PR_320048 Moody's Ratings 23/06/15 https://www.moodys.com/research/Moodys-confirms-Peterborough-Progress-Health-plcs-ratings-with-a-developing--PR_328507 Peterborough and Stamford Hospitals NHS Foundation Trust: Recommendations of the Contingency Planning Team, PriceWaterhouseCoopers, 2013 Enforcement Notice issued on Peterborough City Hospital, 12 April 2016. Cambridgeshire Fire and Rescue Service issued an Enforcement Notice on 22 March 2016. Stephen Graves, Chief Executive at Peterborough and Stamford Hospitals NHS Foundation Trust, said: "Following a review of the fire safety standards to which our hospital has been built, a significant number of issues were identified with the fire separation infrastructure. Work has been going on throughout the hospital since 2015 to both identify the scale of the problem and begin remedial action. The survey work has recently uncovered a more extensive range of defects than originally thought, which means that the work to rectify the problems will take longer than anticipated. This, combined with the fact the remedial work has to take place while the hospital continues to deliver its services to patients, means it will not be completed until February 2019." | ||||
| 27/11/2002 (financial closure) Innisfree Ltd (100%) | Coventry University Hospital University Hospitals Coventry and Warwickshire NHS Trust 39-year PFI contract, construction by Skanska UK Skanska sold 30% equity to Innisfree Ltd in September 2012, which now has 100%. | n/a | 3,761.2 | 378.9 |
| Fire safety concerns at £380m University Hospital Coventry http://www.bbc.com/news/uk-england-coventry-warwickshire-37224973 A report to the Trust Board meeting on 24 November 2016 stated: "A Remediation Plan was developed to address deficiencies in the fire compartment walls that were identified as part of routine maintenance work. Phase 1 of the plan has been implemented and work is on-going" (p77). The report also emphasized: "…the Regulatory Reform (Fire Safety) Order 2005 that the Trust is only responsible for carrying out fire risk assessments in areas under which it has direct management control. Areas such as plant rooms, electrical cupboards, service ducts, service risers, above false ceilings, and other areas which fall under the control of ISS, Vinci and Project Co are risk assessed by those respective organisations" (p80). NHS Trust Board meeting, 24 November, 2016 http://www.uhcw.nhs.uk/clientfiles/File/PUBLIC%20November%202016%20Trust%20Board.pdf The repair bill is estimated to be £47m. Reported that a joint West Midlands Fire Service and NHS Trust investigation revealed "holes in fire compartment walls" http://www.fia.uk.com/news/fire-service-sheds-light-on-failings-at-pfi-hospital.html | ||||
| 31/07/2012 (financial close) | Sheffield Highway Maintenance, Sheffield City Council Amey plc (Ferrovial, Spain) 25 year PFI contract Amey, Aberdeen Asset Management and Tetragon each have 33.3% of SPV equity. | n/a | 1,744.7 | 369.0 |
| Highways, trees and people: Sheffield's secret shame - "…evidence of many high value trees recently removed or to be removed with dubious justification, residents being consulted after felling, extreme interpretations of the risk to people and infrastructure, decades of life left in trees scheduled for removal, and irreplaceable heritage trees under threat" http://www.barrelltreecare.co.uk/pdfs/BTC112-AANews-Complete-151016.pdf An independent street tree survey had recommended 1,000 trees be felled with a further 241 to be crown reduced or considered for felling, 25,000 trees required no work and 10,000 needed some remedial treatment. However, over 4,000 trees have been felled by early 2017 under Amey's '6Ds' approach of removing dangerous, dead, dying, diseased, damaging or causing discrimination ('obstruction with pavements'). Amey has carried out pre-dawn raids to cut down trees, activists have been arrested and Sheffield Tree Action Group membership is now over 5,000. A High Court application by STAG for a judicial review was refused in February 2016. STAG November 2016 update Amey's resurfacing has been widely criticised. 16 roads had to be repaired after resurfacing - 300 metres of a main road, structural failure of another, and 200 metres of three other roads; potholes appeared on other roads. Contract includes an extensive resurfacing and other works in the first five years. The quality and sustainability of 'resurfacing' is widely disputed. | ||||
| 06/05/10 (financial close) | Birmingham Highway Maintenance, Birmingham City Council Amey plc (Ferrovial, Spain), 25-year PFI contract. Amey sold 33.3% of SPV equity to Tetragon Financial Group plc in December, 2010, so Amey, Aberdeen Asset Management and Tetragon each have 33.3%. | n/a | 2,391.5 | 322.0 |
| Birmingham City Council locked in dispute with Amey over potholes and damaged roads. Council to enforce penalty clauses as a result of performance but Amey claimed they had met all milestones. http://www.birminghammail.co.uk/news/midlands-news/birmingham-city-council-locked-disupte-8534597 The dispute that was referred to adjudication, related to the first five years, called the "core investment period". It arose over the proper meaning of the project agreement and its scope. This dispute was referred to Andrew Goddard QC as the adjudicator and his decision was given in July 2015. The council had sought a number of declarations and the adjudicator's decision summarised them in three separate parts (issues one to three). The council subsequently disputed a monthly payment of £1.18 million and claimed it had overpaid Amey some £18.8 million between June 2013 and July 2015. Amey Annual Report 2015 "In 2015, the Group incurred an exceptional charge of £55.0m in respect of the possible impact of an unfavourable resolution of ongoing litigation on the Birmingham contract and a revision of the contract's profitability going forward." https://www.amey.co.uk/media/2204/2803-amey-annual-report-2015_v9-aw-singlepgs.pdf October 2016 In Amey Birmingham Highways Ltd v Birmingham City Council [2016] EWHC 2191 (TCC), HHJ Raeside QC concluded the adjudicator's decision was wrong, as a matter of law, and was not binding on either party. | ||||
| 1/12/11 (financial close) | Glasgow Recycling and Renewable Energy Centre Glasgow City Council, Viridor Limited (Pennon Group plc) and Interserve plc | n/a | n/a | 154.0 |
| 25-year contract to handle 200,000 tonnes of council "green bin" residual waste every year. On 15 November 2016 Viridor terminated Interserve's construction contract. Alan Cumming, Viridor's capital projects director stated: "…our contractor Interserve has continually and repeatedly failed to meet delivery milestones". Construction of the £154m plant started in 2013 and was supposed begin operating in 2016. http://www.thenational.scot/news/viridor-drops-interserve-from-contract-to-build-waste-management-plant-in-glasgow.24820 In August 2016 Interserve's half-yearly results stated: "We are taking action to exit the Energy from Waste sector. Our assessment of the aggregate impact of exiting this sector is in line with the £70 million exceptional charge we announced in May." http://www.interserve.com/investor-centre "Many of Interserve's problems stemmed from three supply chain company insolvencies during construction, the largest of which was gasification technology supplier Energos". http://www.constructionenquirer.com/2016/11/15/interserve-kicked-off-glasgow-energy-plant-job/ | ||||
| 05/02/2006 (financial close) | London Borough of Camden - Chalcot Estate 15-year contract signed in May 2006 - 4 years later than planned for only half the originally proposed 30-year length - between LB Camden (Housing Revenue Account) and Partners for Improvement in Camden Ltd (United House, Rydon, Bank of Scotland) for the refurbishment, management, maintenance, repair, and lifecycle works of five residential tower blocks (712 flats). | n/a | 147.9 | 66.2 |
| Troubled procurement with major delays and cost rises; a rival bidder pulled out, leaving just one bidder for 4 years of negotiations and led the Government to reject the Final Business Case in February 2005 on value for money grounds after the overall contract cost rose from £55m to £120m (Inside Housing, Camden PFI pull out puts plans in doubt, 27 June 2002). http://www.insidehousing.co.uk/camden-pfi-pullout-puts-plans-in-doubt/113530.article Inside Housing, 2005, Camden hit by new blow - http://www.insidehousing.co.uk/camden-hit-by-new-blow/1446311 article 25 Feb 2005). Cost-cutting led to the use of lower quality cladding and windows to the residential tower blocks with a known problem of thermal inefficiency, highly exposed to wind and cold, and selected for PFI investment precisely because of the need to clad and replace the windows (Rumble, N (2009), 'The PFI debacle in Camden Social Housing', 20 January, 2009. http://thebelsizeactivist.blogspot.com/2009/01/pfi-debacle-in-camden-social-housing.html). Council report in July 2009 revealed major resident dissatisfaction and inconvience from the works, unresolved damp, mould, leakage, ventilation, and heating problems, damage to tiles, mould growth and condensation on the new windows, and defects to the cladding panels that led to a new product being sourced (at no cost to the Council), a serious health and safety incident involving a protective metal plate falling from height (LB Camden 2009, Interim Project Report from the Director of Housing to the Camden's Housing and Adult Care Scrutiny Committee, July; see also: Rumble, N (2008), 'Camden PFI Chalcots', 3 December, http://nigel4belsize.blogspot.com/2008/12/camden-pfi-chalcots-december-2008.html To date, Partners for Improvement in Camden has been fined just £14,341 over 10 years and has paid out £3.62 million in dividends to its shareholders. | ||||
| 01/03/2003 (financial close) | London Borough of Islington - Street Properties 1 30-year contract signed in March 2003 between LB Islington (Housing Revenue Account) and Partners for Improvement in Islington Ltd (United House, Rydon, Hyde Housing, Bank of Scotland) for the refurbishment, management and maintenance of 2345 mainly Victorian street properties (1,900 tenanted and 445 leasehold dwellings) of which approximately 20% are Grade II listed and some 50% located in conservation areas. | n/a | 356.9 | 89.0 |
| Hundreds of resident complaints in the first few years of the refurbishment phase under United House over sub-standard works confirmed by Chartered surveyors Consul, (employed by Islington to independently verify residents' complaints) produced two damning reports in 2005: 'We could find no consistency of quality of design in the kitchen layouts and in places isolated wall units had been fitted above seating area or positioned randomly along different wall areas of the kitchen,' (Inside Housing, 'Disunity leads consortium astray', 8 June 2005). Despite an improvement plan being put in place, problems have continued and are ongoing with many examples of tenants and leaseholders taking legal action at repairs and maintenance not being done and some leaseholders having sucessfully overturned being charged for works that were never carried out. In one court case, an independent surveyor found that United House and its various sub-contractors had caused major new structural damage to a Grade II Listed Building by cutting through and undermining a third of the joists, along with approximately 180 further defects and omissions, 6 breaches of gas safety regulations, 33 breaches of water safety legislation, 26 breaches of electrical regulations causing Category 1 hazards under the Housing Health and Safety Rating System and breaches of building regulations and listed building legislation. The scale of the defective works led to the Council to undertake Remedial Works to rectify the original damage and defective PFI works to the value for £92,200. A dispute between Islington Council and Partners for Improvement in Islington Ltd saw the Contractor make claims for compensation leading to a Settlement Deed in July 2010 that involved the Council paying £69,000 plus allowing the Contractor to retain cost savings contractually owed to the Council. To date, Partners for Improvement in Islington has paid out £3.7 million in dividends to its shareholders and Islington has refused to disclose whether any financial penalties have been made against the contractor under S.43 (commercial sensitivity). On 18 January 2012 United House sold its Housing PFI investment portfolio to John Laing Infrastructure Fund. | ||||
| 15/09/2006 (financial close) | London Borough of Islington - Street Properties 2 16-year contract signed in September 2006 between LB Islington (HRA) and Partners for Improvement in Islington 2 Ltd for the refurbishment, management, and maintenance of 4118 street properties not included in the Street Properties 1 scheme. | n/a | 421.3 | 153.0 |
| Has experienced near-identical problems to the Street Properties 1 PFI scheme with lots of examples of properties and residents with poor or defective works compounded by poor service repair - covered in the Islington Tribune newspaper. Having completed its major works contract on both schemes, on 18 January 2012 United House sold its Housing PFI investment portfolio to John Laing Infrastructure Fund. To date, Partners for Improvement in Islington 2 Ltd has paid out £7.5 million in dividends to its shareholders and the Council has refused to disclose whether it has levied any financial penalties on the contractor. | ||||
| 15/09/2006 (financial close) | Leeds City Council - Swarcliffe 30-year contract signed in March 2005 - 3 years later than planned -between Leeds City Council (Housing Revenue Account) and Yorkshire Transformations Ltd (Carillion, Yorkshire Housing Ltd, Bank of Scotland) for refurbishment and on-going maintenance (excluding management) of 1659 homes and the demolition of 949 council flats and maisonettes on the Swarcliffe council estate in Leeds. | n/a | 271.2 | 153.0 |
| Major delays and cost increases during procurement led the government to delay approval of another housing PFI scheme in Leeds. Major problems rapidly emerged in the construction phase at a time when Mowlem was being taken over by Carrillion. Some 18 months after the contract had begun, not a single council home had been refurbished to satisfactory standards. More than 330 council tenants made complaints about the work (Seacroft Today, 2009). http://www.seacrofttoday.co.uk/news/Tenants39-woes-follow-113m-Swarcliffe.4915259.jp An electrical inspector who worked on the site for two and half years went public that botched work had left residents at risk of electrocution with 80 per cent of properties he inspected at risk of gas explosions from poor electrical work and nearly 500 properties did not have wiring properly earthed (Yorkshire Evening Post http://www.yorkshireeveningpost.co.uk/news/Leeds39s-39deathtrap-timebomb39.4843178.jp To date, Yorkshire Transformations Ltd has paid £3.493m in dividends to its shareholders and the council is rumoured to have made over £300,000 of penalty deductions mainly in the early construction phase. | ||||
| 05/07/2013 (financial close) | Leeds City Council - Little London, Beeston Hill and Holbeck 20-year contract signed in July 2013 after a 9 year procurement disaster between Leeds City Council (HRA) and Sustainable Communities for Leeds (Keepmoat, Frank Haslam Milan, Equitix) for the regeneration of two separate Leeds inner-city council estates: Little London, a residential area immediately to the north of the city centre near to the universities; and Beeston Hill and Holbeck to the immediate south of the city centre. | n/a | 327.6 | 138.0 |
| Overall, the contract will refurbish 1222 council homes and reprovide 501 council homes of 662 being demolished, plus environmental works and maintenance over 20 years. The project brings together an original Round 2 HRA scheme - Little London - and the Round 5 HRA Beeston Hill and Holbeck scheme, after both schemes were subject to significant procurement delays and problems. The Little London project has a particularly complex and controversial history that involved major local tenant opposition to the PFI route and conflict with the local authority that persuaded the Labour government to require Leeds City Council to consult residents again after 2005; the scheme was then further delayed by the 2008 financial crisis and the 2010 Coalition government review of PFI, and the decision of its original funder to pull out, forcing the council to invest £40 million of its own HRA reserves in the capital works and for the consortium to issue a bond for the rest of the finance. Over these 9 years, the Little London regeneration blueprint was fundamentally altered. All private housing development was also removed from the wider regeneration plan due to market uncertainty. The planned PFI redeveloment of the Community Hub was removed from the PFI scheme and instead the existing site was redeveloped partly through the sale of the former housing office to a national retailer. The Beeston Hill and Holbeck scheme has been far less controversial, but has also seen significant delays and changes to the project scope since it was first bid for as part of Round 3 in January 2004, Round 4 in January 2005 and then Round 5 in April 2006 after it had been previously rejected. | ||||
| 20/10/2006 (financial close) | Oldham MBC - Sheltered Housing PFI 30-year contract signed in October 2006 between Oldham Council (non-HRA) and Oldham Retirement Housing Partnership Ltd (Housing 21), PRG Bullock, Allied Irish Bank Group (UK) Plc) and after a troubled procurement process that was delayed by two years. | n/a | 434.4 | 108.0 |
| Project originally was a joint initiative with Rochdale Council but only two firms registered an interest, forcing Oldham and Rochdale to split their projects into two separate schemes and re-advertise in 2004. Major problems in Oldham emerged in late 2012 when Oldham Council implemented large financial penalty deductions over defective works relating to building contractor, Bullock, for which Housing 21 was legally liable. Dispute resolution talks led to a deed of variation in August 2013 in which Bullock left the contract and Housing 21 agreed to a £20m programme of rectification works from 2013 to 2016 that led to a £12.3 million loss - a total of £32.3 million financial hit on Housing 21. Inside Housing, 20/12/12, http://www.insidehousing.co.uk/regulation/regulator-seeks-reassurance-over-pfi-losses/6525115.article Housing 21 Chief Executive, Pushpa Raguvaran, was forced to leave her post and Housing 21 was subsequently criticised by the Homes and Communities Agency in a regulatory judgement published in August 2013 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/547698/housing_21_rj.pdf Inside Housing, 28/08/13, | ||||
| 05/04/2012 (financial close) | London Borough of Lambeth - Myatts Field North 25-year contract signed in May 2012 between LB Lambeth and Regenter Myatts Field North Limited (John Laing, Pinnacle, Higgins, E.ON, Norddeutsche Landesbank Girozentrale (Nord/LB), Co-operative Bank, Nationwide Building Society) for demolition and replacement of 305 council homes (including 58 leaseholder), refurbishment of 172 homes, plus management and maintenance, estate remodelling, new park and community centre, and the reconnection of the district heat and power system under 40-year contract with E.ON. | n/a | 269.0 | 80.6 |
| Scheme suffered major procurement delays, cost increases and numerous project changes compounded by the 2008 financial crisis and its aftermath that included the Coalition government levying a 10% cut in promised PFI credits for the scheme in 2010, amounting to a £16 million hole in the project's finances. Major problems have engulfed every aspect of the construction phase with a large volume of residents complaints over defective works and services in both new build and refurbished properties currently being experienced through floods from faulty pipework. There have been public healthy and safety complaints (Construction News, 2014 - 6 August). Controversy over the E.ON-run district heating system that despite regular outages and unaffordable and inaccurate bills, residents are being told they cannot terminate their contracts with E.ON (see Hodkinson and Essen, 2015). http://eprints.whiterose.ac.uk/85448/1/Hodkinson_Essen_2015.pdf Inside Housing, 2016, 'The Story of the Camberwell Submarine', 19 February, http://www.insidehousing.co.uk/the-story-of-the-camberwell-submarine/7013918.article Novaramedia, 2016, 'Redeveloped into fuel poverty', 24 July, http://novaramedia.com/2016/07/24/redeveloped-into-fuel-poverty-the-story-of-myatts-field-north/ The PFEye Watchdog, Lambeth has levied around £160,000 in financial penalties on Regenter since 2014. | ||||
| 06/04/2007 (financial close) | London Borough of Lewisham - Brockley housing 20-year contract signed in June 2007 between London Borough of Lewisham and Regenter B3 Ltd (John Laing, Higgins, Pinnacle, Rydon, Sumitomo Mitsui Banking Corporation) for the refurbishment, management and maintenance of 1365 council homes, a mix of flats on estates, small infill blocks of flats and individual street properties. | n/a | 378.4 | 96.0 |
| Procurement was delayed after two bidders withdrew early on from the process towards the end of 2002. By 2009 major problems had emerged in relation to disputed major works to many of the 500 leasehold properties in the scheme that resulted in a Class Action of 23 leaseholders against Regenter B3 and Lewisham Council at the Leasehold Valuation Tribunal between 2009 and 2012. Lewisham accepted the findings on quality, cost and necessity of works, and poor standards of service repair and management, and instructed Regenter and Higgins to ensure all defects and outstandings works be completed to the satisfaction of leaseholders and produce an Improvement Plan for 2012/13 (LB Lewisham Housing Select Committee, 2012 - Brockley End of Year Review 2011/12 - 17/05/12). Over 2013 and 2014, Lewisham fined Regenter £115,667 (Regenter B3 Company Accounts). To date, Regenter B3 has paid out £3,726,000 in dividends to its shareholders. | ||||
| 17/09/2013 (financial close) | Salford City Council - Creating a new Pendleton 30-year contract signed in September 2013 after major procurement delays and project re-scoping between Salford City Council (HRA) and Pendleton Together Operating Ltd (Chevin, Keepmoat and Barratt) for the refurbishment of 1250 homes, the demolition of 885 homes, and the development of 1600 new homes, of which 500 will be 'affordable', plus management and maintenance of the council homes and estate remodelling. | n/a | 430.8 | 78.7 |
| Procurement was beset with problems, largely imposed by the 2008 financial crisis and further legal and risk issues in the sector. In 2013, the funder for the project withdrew and a bond was issued instead. A major side-effect of the PFI project has been the forced stock transfer of Salford's ALMO, Salix Homes, which was partly caused by the growing costs of the PFI project rendering Salix's business plan for investment unaffordable over the long-term due to borrowing constraints. The government wrote off £65.1m historic housing debt in 2014 as part of the stock transfer deal! http://studylib.net/doc/16041950/salford-city-council---record-of-decision | ||||
| 01/09/2000 contract award | Yarl's Wood Removal Centre, Bedfordshire PPP design, build, operate contract to avoid PFI model because of timescale. Group 4 Amey Immigration Limited (GAIL) Operated by GSL, a Group 4 Falck subsidiary until May 2004 when GSL was sold to Englefield Capital (40%), Electra Partners Europe (40%) and management (20%). GSL's contract was not renewed in September 2003 when Serco Group plc took over the centre. | n/a | 116.0 for 6 years | 63.3 |
| Intended to house 900 immigration detainees, including ("failed asylum seekers and illegal migrants"). Opened November 2001. Home Office rushed design, procurement, construction, no sprinkler system and wanted completion in less than a year, but was 6 months late. Within three months a major disturbance led to half centre being destroyed by fire. Prisons and Probation Ombudsman Inquiry, 2004, details the construction and operation of Yarl's Wood, as well as events before, during and after the fire in February 2002. Capita, PriceWaterhouseCoopers and two firms of lawyers engaged in design and procurement of the Centre. http://www.ppo.gov.uk/wp-content/uploads/2015/11/special-yarls-wood-fire-021.pdf G4S can use Victorian riot law to sue Bedfordshire Police for £32m. Court of Appeal concluded that Bedfordshire Police Authority can be sued under the 1886 Riot Damages Act for £32m damage caused by the 2002 fire. NAO report 2016: Serco now runs residential services for Home Office, G4S health services for NHS England. Serco's reduction of staff meant there were insufficient operational and management staff; Services at Yarl's Wood did not fully meet the needs of users; The contracts required that training should be provided but staff at the centre were not adequately trained to deal with the particular concerns, issues and vulnerabilities of those in immigration detention. https://www.nao.org.uk/wp-content/uploads/2016/07/Yarls-Wood-Immigration-Removal-Centre.pdf | ||||
| 01/04/2005 (financial close)
| South Bank Primary School, Redcar & Cleveland Council Redcar & Cleveland Grouped Schools PFI 5 schools, 29-year contract. Built by Mowlem plc (later acquired by Carillion plc) and Robertson Capital Projects. SPV now owned jointly by 3i private equity and Dalmore Capital finance. | n/a | 294.7 | 48.9 |
| Opened summer 2006 but cracked internal walls appeared after two years when the ground fill became saturated and expanded. Four other schools not affected. Carillion originally planned to close the school for a year and replace the ground floor and fill. They started the work in 2015 but the defective fill was so extensive that demolition was necessary. PFI school to close for repairs to structural problems just eight years after opening, 3 June 2014: Carillion suspended work on site in April 2015 when it discovered the majority of the foundations were build on defective fill. A structural engineer's report recommended demolition and a rebuild, 8 July 2015: http://www.thenorthernecho.co.uk/news/13375340.School_to_be_demolished_less_than_a_decade_after_opening/ | ||||
| South Bank has 269 nursery and primary pupils. The school initially closed for 14 months but it will be three years by September 2017 when the new school is planned to open. Free transport is provided to the temporary school a mile away where temporary classrooms have been built, 12 July 2016: http://www.gazettelive.co.uk/news/teesside-news/multi-million-pound-school-being-11600418 | ||||
| 01/08/2001 | Sheffield City Council Waste Contract Veolia 35-year PPP contract | n/a | 1,300.0 | n/a |
| Contract includes Bernard Road energy from waste plant, (which is owned by the Council) and waste collection. Threatened termination and plans to retender services in 2017 with termination of the Veolia contract 2018. The contract is expected to cost £27m in 2017/18 and employs 280 staff. Report to Cabinet 18 January 2017 http://democracy.sheffield.gov.uk/documents/s25096/Waste%20Services%20Review.pdf Once interim contract expires the Council will consider returning to in-house provision: "However, the recommendation is that the contract will include a requirement for bidders to set out how they will introduce new ways of working to bring greater efficiencies and safer working practices and at the same time enable the Council to consider insourcing this service following expiry of the contract." http://www.letsrecycle.com/news/latest-news/sheffield-debates-early-end-to-veolia-pfi-contract/ | ||||
| Total 43 | 2,139.8 (2) | 36,105.7 | 4,459.1 | |
1. Not included in column totals. 2. Most costs yet to be determined, so this is a fraction of total costs.
Details of contract terminations, cost overruns and delays in PFI/PPP information and communications technology contracts 1998-2007 are available in Cost Overruns, Delays and Terminations in 105 Outsourced Public Sector ICT Contracts, ESSU Research Report No. 3 by Dexter Whitfield, 2007.