PFI and PF2

Since the introduction of PFI in the 1990’s private finance procurement has provided government departments with around £60 billion of investment. Unlike conventional forms of procurement the use of private finance means that the public sector doesn’t have to pay for the construction of the asset upfront. Instead it transfers construction risk to the private provider and enters into an agreement to pay the contractor for the use of the asset once it is operational. This results in long-term financial commitments for government departments and public bodies.

In 2012 the government set out a new approach to its private finance procurement model with the launch of PF2. Changes included: the introduction of a public sector equity stake in new projects, a streamlined procurement process, and increased flexibility of service provision.

We are planning to report on: the costs and benefits of PFI; managing and making savings from legacy PFI deals; changes made under the new PF2 model.

If you would like to provide evidence for our study please email the study team on enquiries@nao.gsi.gov.uk, putting the study title in the subject line. The team will consider the evidence you provide; however, please note that due to the volume of information we receive we may not respond to you directly. If you need to raise a concern please use our contact form.