1.10 Almost all government departments are involved in PFI contracts, either as an authority or as a sponsor department. The departments with the highest number of PFI contracts are the Department for Education (DfE) and the Department of Health & Social Care (DHSC) with 173 and 128 respectively (Figure 5). Over the next seven years,10 we estimate that the following six departments are involved, either as authorities or sponsor departments, in 88% of the 72 PFI contracts that are due to expire: Ministry of Defence (16 contracts), DfE (13), Department for Transport (11), Ministry of Justice (10), Home Office (8) and DHSC (5).11
1.11 The PFI model has been used to deliver many different types of assets, ranging from military equipment to roads and street lighting. Over the next 30 years, the majority of PFI contracts that are due to expire can be classified as 'accommodation'-type projects, such as schools, hospitals and office buildings (Figure 6 on page 20). There are variations between contracts for different asset types and variations within the same asset type - this is because no two PFI projects are the same.
1.12 Since the adoption of the PFI model in the early 1990s, contracts have gradually evolved as government developed a greater understanding of the typical risks. Since 1999, HM Treasury has published guidance known as Standardisation of PFI Contracts (SoPC) to address these challenges. It published the first guidance in 1999, and there have been multiple iterations since then. Within the PFI contracts surveyed, around 45% are pre-SoPC (Figure 7 on page 21) and therefore contain a higher risk of ambiguity in their contracts, potentially leading to disputes (see Part Two).
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10 The total number of PFI contracts expiring in the next seven years covers the period 2020-21 to 2026-27.
11 Data represents the position as at 31 March 2018 in HM Treasury's 2018 PFI database. Between 31 March 2018 and the time of publication, a small number of PFI contracts have been terminated or expired. Data are NAO estimates based on the year of the final unitary charge payment.