6. Authorities face a range of challenges in managing the expiry of PFI contracts, such as ambiguous hand back clauses, restricted access rights to information and limited recourse options.12 The PFI contract itself is central to understanding the challenges an authority may face. However, these contracts are long, complex documents and will have been revised over time to change service requirements or to deliver savings. Local Partnerships highlighted one contract where there had been seven major variations and 75 smaller ones, none of which had been gathered together into a complete document. The NAO similarly highlighted that the authority should hold a complete and up-to-date copy of the PFI contract, but found examples where part, or all of the contract had been lost.13 We were surprised to hear that these contracts are not always easily accessible as they can be held on older technology. Local Partnerships told us of an instance where a copy of a contract was held on a CD-ROM.14 A lack of standardisation in earlier PFI contracts means the clarity of expiry clauses may vary, depending on when the contracts were entered into. The Treasury first published standardised PFI contract guidance in 1999, and since then there has been more than four iterations, each one building on the experiences of past PFI projects.15
7. The NAO report recommended that the IPA should assess the costs and benefits of developing an electronic repository of PFI contracts.16 We asked the IPA why it did not hold a central registry of contracts and whether it thought that this would be a useful addition. The IPA told us that it did not hold a central registry of all contracts even though the data on PFI contracts is "not great". It explained that it did not consider creating a registry to be value for money given the complexity of the contracts and the size of the recording that would be required. The IPA added that it has started to collect key parts of contracts, on a small scale, as part of its health check tool, and that it had discussed with "key departments" about them holding registries of their contracts.17 We received written evidence from Affinitext, which told us that the Ministry of Defence had implemented a central electronic repository for 18 of its PFI contracts, and that this was also common practice for investors across the portfolio of PFI projects they own.18 Affinitext added that a central repository would allow sponsor departments, the IPA and Local Partnerships to identify high-risk projects and enable a more consistent approach across government, allowing the public sector to catch-up with the best practice of the private sector.19
8. The IPA maintains a publicly available PFI database, which includes information on each of the 700 contracts, such as the value of the project, annual payments, date the contract was signed and contract length. The database does not, however, include the date each contract will expire.20 The IPA told us that this was something it could look to include in future versions of the public database. The IPA aimed to update the database annually, but noted that it relied on returns provided by each department to create the database. It admitted it was not 100% confident that all PFI contracts were actually reported, especially those owed by local bodies.21
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12 C&AG's Report paras 14, 2.13-2.16, 3.29
13 Q 34; C&AG's Report, para 3.3
14 Q 49
17 Q 37
18 Affinitext is an information technology and services company. It uses artificial intelligence technology to allow complex documents such as contracts to be easily read, understood and managed.
19 MPC0003 - Affinitext, para 8.1a
20 Q 12; C&AG's Report, para 3.4