Background

There are over 550 current PFI contracts (excluding those in the devolved administrations) in respect of which the PFI Centre of Excellence, run by the IPA, provides expert support and advice to departments and contracting authorities. As the PFI programme matures an increasing number of projects are approaching expiry. Some 78 projects will expire between April 2021 and December 2027 and a further 91 projects in 2028-30.

Figure 1: PFI expiries by calendar year (excl devolved administrations)

The expiry phase of a PFI project brings new challenges as the contracting authority not only has to manage business as usual (BAU) in terms of PFI contract management but also has to plan for the hand-back of assets and services under the contract and to ensure service provision post expiry.

There are specific risks in the expiry phase, for example around the quality of assets on hand-back and the availability of data and information to manage assets and services post PFI expiry. In addition, there can be relationship pressures as PFI investors look to optimise returns prior to expiry.

A 2020 survey of contracting authorities by the NAO that formed the basis of its June 2020 Report 'Managing PFI assets & services as contracts end' found that a significant proportion of authorities felt unprepared for PFI expiry and anticipated significant issues in managing the expiry process.

The IPA's PFI Contract Management Programme, which was established in 2020 in advance of the NAO report, has PFI contract expiry as a central work-stream within its programme. This document sets out in summary our overall approach to expiry support for authorities.