This investigation looks at the British Business Bank’s approval of Greensill Capital’s access to government business support schemes.
Carillion going into liquidation left two new hospitals unfinished. The projects will now be completed with public finance.
A briefing on the rationale, costs and benefits of the Private Finance Initiative; the use of and impact of PFI, and ability to make savings from operational contracts; and the introduction of PF2. There are currently over 700 operational PFI and PF2 deals, with a capital value of around £60 billion and annual charges for these deals amounted to £10.3 billion in 2016-17. Even if no new deals are entered into, future charges which continue until the 2040s amount to £199 billion.
18 January 2018
The Treasury Committee asked the National Audit Office to undertake an analysis of the VFM assessment process and model for PFI. The assessment process combines a quantitative and qualitative approach to VFM appraisal. Our review focused, primarily, on the use of the financial model in the VFM assessment process and was submitted to the Treasury Committee as part of their inquiry into PF2.
Progress on the Government’s initiative to achieve £1.5 billion worth of savings from operational PFI contracts.
Equity investors have helped to deliver many public sector infrastructure projects via the Private Finance Initiative and have managed them in ways from which the public sector can learn. Against a background of limited information, evidence gathered by the National Audit Office raises concern that the public sector is paying more than it should for equity investment.
Lessons from the large body of experience of using PFI can be applied to improve other forms of procurement. Government should also do more to act as an ‘intelligent customer’ in the procurement and management of projects.
By setting up an Infrastructure Financing Unit, Treasury helped reactivate the lending market for private finance projects. While the costs for projects in 2009 represented value for money, Treasury should not presume that continuing the use of private finance at current rates will be value for money.
The use of PFI by local authorities to improve housing, usually in areas with a high need for housing and where stock condition is particularly poor, has had a measure of success. However, risks to value for money of the programme have not been managed.
Most PFI hospital contracts are well-managed and the evidence indicates that they are currently achieving the value for money expected when the contracts were signed. There continue to be risks, however, to the long-term value for money of these contracts.
