A4.18 For PPP options where costs are classified to the public sector, capital costs are not spread over a scheme's lifetime. They instead occur relatively early in its implementation. As is the case for all other public capital spending, the costs accrue to the National Accounts (and therefore to the procuring public body's accounts) during the creation of the asset.
A4.19 The overall fiscal envelope is centrally determined in the Budget, as are departmental and other public sector bodies' budget allocations. Capital used should therefore be accounted for in the spending body's capital budgets in accordance with accounting rules. Payments that account for provision of services as part of a scheme and other costs to the PPP partner, including their cost of capital required to fund the scheme, are accrued to the accounts as they are charged during the life of the scheme.