Recommendations & Conclusions
30 items
2
Conclusion
39th Report - Government’s use of priva…
Accepted
The Treasury has not identified which financing models represent value for money for different types of infrastructure assets. A range of financing models are currently in use for delivering public infrastructure including but not limited to: Contracts for Difference; Regulated Asset Base models; and Public Private Partnerships, of which the …
Government response. The government claims the recommendation is implemented, stating that the Treasury already evaluates costs and benefits of alternative financing models on a case-by-case basis using the Green Book to ensure value for money.
HM Treasury
3
Recommendation
39th Report - Government’s use of priva…
Accepted
There is no central record of private finance for infrastructure investment, which limits the Treasury’s ability to spot themes and patterns and deliver value for money. The overall value and number of infrastructure projects delivered using private finance models other than PFI are significant. For example, on the Regulated Asset …
Government response. The government committed to expanding and developing the existing Infrastructure Pipeline over time to include more detail relevant to investors, and will explore where the committee's requested information would best fit.
HM Treasury
4
Recommendation
39th Report - Government’s use of priva…
Accepted
The government’s ambitions for infrastructure investment are at risk of not being achieved because of sector specific skills shortages. Using private finance to support investment requires public bodies to develop and maintain specialist commercial and financial skills. The NAO has previously reported that contracting authorities often had limited in- house …
Government response. The government committed to expanding the scope of existing initiatives to build, attract, and retain the necessary private finance skillset within the public sector, and NISTA will publish new PFI contract and performance management guidance later in 2025.
HM Treasury
5
Conclusion
39th Report - Government’s use of priva…
Accepted
There is no comprehensive framework for considering risk allocation between the public and private sector when working in partnership. Risks should be borne by those who are best able to manage them and should be priced appropriately. Not all risks can or should be transferred to the private sector because …
Government response. The government committed to the Treasury and NISTA setting out further guidance by May 2026 regarding contract and performance management, and how to reset infrastructure projects, complementing existing guidance.
HM Treasury
6
Recommendation
39th Report - Government’s use of priva…
Accepted
Poor contract management is impacting the quality and condition of PFI assets being handed back to the public sector. Public bodies are due to pay £136 billion in unitary charges up until 2052–53 for all 665 ongoing PFI contracts, with half of these contracts set to expire within the next …
Government response. The government, through NISTA's PFI Contract Management Programme, committed to undertaking surveys across privately financed assets to improve central support and will publish new contract and performance management guidance later in 2025.
HM Treasury
1
Conclusion
39th Report - Government’s use of priva…
Deferred
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Treasury (the Treasury) and the National Infrastructure and Service Transformation Authority (NISTA) on the lessons learned from government’s past use of private finance for infrastructure projects.1 We also took evidence from Darryl Murphy, …
Government response. The government acknowledged the committee's conclusion and stated that the National Infrastructure and Service Transformation Authority (NISTA) has written to the Committee separately.
HM Treasury
7
Recommendation
39th Report - Government’s use of priva…
Accepted
To improve the transparency of longer-term investment priorities and to support investors with planning, the IPA had published the National Infrastructure and Construction Pipeline annually from 2016 to 2024 – with the exception of 2019, 2020 and 2022. The 2024 publication contains details of the forthcoming procurement and assumptions for …
Government response. The government has launched a new dynamic Infrastructure Pipeline, published by NISTA in July 2025, which will be updated every six months to improve transparency and support investor planning.
HM Treasury
8
Conclusion
39th Report - Government’s use of priva…
Accepted
We highlighted to NISTA that the infrastructure pipeline has been too short-term and lacked consistency, which has caused issues with future planning and made longer-term decision-making for investors difficult.12 Written evidence we received also referenced the lack of a central pipeline of infrastructure projects and investment opportunities in the UK, …
Government response. The government states the recommendation is implemented, having launched a new dynamic Infrastructure Pipeline via NISTA in July 2025, which will be updated every 6 months to provide greater certainty for industry and investors.
HM Treasury
9
Recommendation
39th Report - Government’s use of priva…
Accepted
We asked NISTA what it was doing to create a pipeline for investors that supports long-term decision making. It told us that it was aware the previous pipelines were construction industry focused, contained gaps, and only gave information on costs and schedules.15 In response to these issues it has committed …
Government response. The government has launched a new dynamic Infrastructure Pipeline, published by NISTA in July 2025, which will be updated every six months to be investor-focused and provide greater granularity on financing models.
HM Treasury
10
Recommendation
39th Report - Government’s use of priva…
Accepted
The government does not have an evidence base upon which to judge which financing models are best suited for particular projects and as such, the government may not be achieving value for money on some infrastructure projects.17 In addition, the absence of an evaluation means that government cannot make the …
Government response. The government states the recommendation is implemented, asserting that its 10 Year Infrastructure Strategy, Green Book appraisals, and NISTA's advice already provide the framework for selecting financing models based on value for money and project specifics.
HM Treasury
11
Recommendation
39th Report - Government’s use of priva…
Not Addressed
Though government attempts to determine the success of a project through measures such as cost-benefit analysis, they do not routinely evaluate completed projects.19 The UK has used a variety of private financing models to deliver new infrastructure, including but not limited to: Contracts for Difference, which guarantee wholesale prices for …
Government response. The government's response describes its existing pre-project appraisal process using the Green Book to identify the preferred financing model, but does not commit to or address the recommendation for routinely evaluating completed projects post-implementation.
HM Treasury
12
Recommendation
39th Report - Government’s use of priva…
Not Addressed
The National Audit Office’s (NAO) report on evaluating government spending highlighted that much of government’s activity is either not evaluated robustly or not evaluated at all, despite the government’s commitment to evidence-based decision-making.22 In addition, there 17 C&AG’s Report, para 3.26-3.27 18 C&AG’s Report, para 3.27-3.29 19 C&AG’s Report, para …
Government response. The government's response describes its existing pre-project appraisal process using the Green Book to ensure value for money, but does not commit to or address the recommendation for robust post-project evaluation or comparative assessments of financing models.
HM Treasury
13
Conclusion
39th Report - Government’s use of priva…
Not Addressed
The Treasury told us that the proportion of major projects that have been evaluated has improved since the NAO’s evaluation report. After our evidence session, the Treasury wrote to us and stated that 68% of infrastructure and construction of major projects have a high-quality evaluation plan. Across all major projects, …
Government response. The government states the recommendation is implemented, but its response focuses on the Green Book appraisal process for selecting financing models, not directly addressing the committee's concern about the proportion of major projects lacking high-quality evaluation plans.
HM Treasury
14
Conclusion
39th Report - Government’s use of priva…
Accepted
Historically, private financing was sometimes selected over public financing because it did not increase short-term government borrowing. This kept public sector debt levels down, as the assets were considered off-balance sheet for national accounts purposes. The Office for Budget Responsibility called this a “fiscal illusion”: where the accounting measure does …
Government response. The government states the recommendation is implemented, affirming that its 10 Year Infrastructure Strategy and Green Book appraisals ensure value for money and that financing model selection is project-specific, consistent with the Treasury's existing position.
HM Treasury
15
Conclusion
39th Report - Government’s use of priva…
Not Addressed
The overall value and number of infrastructure projects delivered using private financing models is significant, for example, on the Regulated Asset Base model, a combined £9 billion was invested in Thames Tideway Tunnel and Heathrow Terminal 5.28 In addition, the government announced in June 2025 that it will invest £14.2 …
Government response. The government states the recommendation is implemented, but its response focuses on the Green Book appraisal process for selecting financing models, not addressing the lack of central monitoring or digitised contracts for non-PFI private finance projects.
HM Treasury
16
Conclusion
39th Report - Government’s use of priva…
Accepted in Part
The Treasury publishes data on the number of active PFI contracts, which includes information on: the capital value of assets; when contracts are due to expire; and the remaining unitary charges.32 As of 31 March 2024, there were 665 PFI contracts with a capital value of £50 billion – 79% …
Government response. The government agrees and sets a May 2027 target, committing to expand and develop the Infrastructure Pipeline to include more investor-relevant detail and explore optimal publication methods for requested information, while noting existing annual PFI/PF2 data.
HM Treasury
17
Recommendation
39th Report - Government’s use of priva…
Accepted
In 2021, the IPA told the previous Committee that it was unable to conclude its evaluation of the benefits of PFI because it was unable to draw any meaningful conclusions from the data.37 The Treasury told us that the IPA was asked to deliver the information on benefits but found …
Government response. The government agrees to improve data availability, with a target implementation date of May 2027, by expanding the Infrastructure Pipeline over time to include more investor-relevant detail and continuing to publish PFI/PF2 project data annually.
HM Treasury
18
Conclusion
39th Report - Government’s use of priva…
Accepted
The Public Accounts Committee has, in recent years, frequently drawn attention to how public bodies lack the necessary in-house skills to deliver on plans and programmes.39 We also heard from Mr Dalgleish that the lack of a credible pipeline has meant investment cannot be deployed, resulting in skills and labour …
Government response. The government agrees and sets an October 2026 target, committing to expand existing initiatives like Skills England and the Office for Clean Energy Jobs to identify and address the public sector's private finance skillset and workforce requirements.
HM Treasury
19
Recommendation
39th Report - Government’s use of priva…
Accepted
There is a general recognition that sectors, including the construction industry, may lack the appropriate skills and workforce to deliver on the government’s infrastructure strategy. NISTA told us that, in collaboration with the Department for Business and Trade and the Department for Education, it has a role in supplying the …
Government response. The government agrees to address infrastructure skills gaps, with a target date of October 2026, by continuing to partner with industry, providing training, leveraging Skills England, and expanding existing initiatives to build and retain necessary private finance expertise.
HM Treasury
20
Conclusion
39th Report - Government’s use of priva…
Accepted
Using private financing requires skills and capabilities from public and private sector partners including, financial, commercial, construction, project and contract management abilities.44 The lack of a stable and consistent pipeline has contributed to the private sector not investing as much as it might have, while long contracts make it difficult …
Government response. The government agrees and sets an October 2026 target, committing to expand existing skills initiatives like Skills England to ensure the public sector builds, attracts, and retains the necessary private finance skillset and workforce for infrastructure investment.
HM Treasury
21
Conclusion
39th Report - Government’s use of priva…
Accepted
The Treasury told us that the formation of NISTA, which brought together the strategy of the National Infrastructure Commission and the delivery of the IPA, brings increased focus on contract management.47 In addition, it told us that public financial institutions, such as the National Wealth Fund, will be responsible for …
Government response. The government agrees and sets an October 2026 target, committing to expand existing skills initiatives like Skills England to ensure the public sector builds, attracts, and retains the necessary private finance skillset and workforce for infrastructure investment.
HM Treasury
22
Recommendation
39th Report - Government’s use of priva…
Accepted
There are many risks to delivering major infrastructure projects, such as financing risk, construction risk, and demand for the asset being lower than expected.49 These risks should be transferred to those best able to manage them, and when they are transferred to the private sector, it comes with costs: it …
Government response. The government agrees to improve risk management and transfer, with a target date of May 2026, by committing to issue further guidance on contract and performance management and resetting infrastructure projects.
HM Treasury
23
Conclusion
39th Report - Government’s use of priva…
Accepted
We asked the Treasury how it decides on which private finance model to use, and how it assesses the additional cost of private finance against the benefits of risk transfer. The Treasury told us that the benefit of private finance is that the private sector is incentivised to take on …
Government response. The government agrees with the committee's observation regarding private finance models and risk assessment. The Treasury and NISTA commit to publishing further guidance by May 2026 on contract and performance management, as well as how to reset infrastructure projects.
HM Treasury
24
Conclusion
39th Report - Government’s use of priva…
Accepted
We heard from Mr Dalgleish that sometimes, with private finance, government has a misplaced assurance that risk transfer to the private sector equates to risk management by the private sector, which offers a false assurance that the risk lies outside of the public sector.55 Risk management by the public sector …
Government response. The government agrees with the committee's observation regarding public sector risk management in private finance projects. The Treasury and NISTA commit to publishing further guidance by May 2026 on contract and performance management, and how to reset infrastructure projects.
HM Treasury
25
Recommendation
39th Report - Government’s use of priva…
Accepted
We asked the Treasury how it supports government departments to prepare for and manage potential supplier failure, and what contingency plans it had in place to address supplier failures, particularly for critical services, to avoid over-reliance on Government support. The Treasury 51 C&AG’s Report, para 3.7 52 Q 62; C&AG’s …
Government response. The government agrees to enhance support for managing supplier failure, with a target date of May 2026, by issuing further guidance on contract and performance management and how to reset infrastructure projects.
HM Treasury
26
Conclusion
39th Report - Government’s use of priva…
Accepted
Half of the 665 ongoing PFI contracts are set to expire within the next decade, at which point the assets usually revert to the public sector.58 It is important that public authorities manage these contracts well so that assets in good condition return to the public sector.59 Unitary charges are …
Government response. The government agrees with the committee's observation. NISTA has an ongoing PFI Contract Management Programme supporting authorities with expiry planning, asset condition assessment, and contract management reviews. NISTA will also publish new contract and performance management guidance later in 2025 …
HM Treasury
27
Recommendation
39th Report - Government’s use of priva…
Accepted
The NAO has previously reported that the public sector does not take a strategic or consistent approach to managing PFI contracts as they end, and risks failing to secure value for money during expiry negotiations with the private sector. Around one-quarter of respondents from public bodies to a survey stated …
Government response. The government, through NISTA's PFI Contract Management Programme, is providing comprehensive support including training, guidance, and direct advice for PFI contract expiry, asset condition, and management, with new guidance to be published later in 2025.
HM Treasury
28
Conclusion
39th Report - Government’s use of priva…
Accepted
In 2020, the IPA set up the PFI Centre of Excellence to provide expert support and advice to contracting authorities, and in the same year established the PFI Contract Management Capability Programme to support contracting authorities managing PFI contracts through the operational and expiry phases.66 In 2022, the IPA further …
Government response. The government confirms NISTA's PFI Contract Management Programme provides ongoing support for PFI contract management, expiry, and asset condition, and commits to publishing new contract and performance management guidance later in 2025.
HM Treasury
29
Conclusion
39th Report - Government’s use of priva…
Accepted
The NAO noted in its latest report on Private finance for infrastructure that while there has been some progress made, much remains unchanged, with public bodies continuing to show a lack of preparedness for contract expiry – particularly for long-term contracts.68 We asked Mr Dalgleish how effective he thinks the …
Government response. The government agrees with the committee's observation. NISTA has an ongoing PFI Contract Management Programme supporting authorities with expiry planning, asset condition assessment, and contract management reviews. NISTA will also publish new contract and performance management guidance later in 2025.
HM Treasury
30
Recommendation
39th Report - Government’s use of priva…
Accepted
One of the underlying principles of the PFI model was its design to be self-monitoring, with the project delivery company responsible for reviewing its own performance and reporting back to the contracting authority. But this self-monitoring should not preclude authorities from having appropriate access to data and information to support …
Government response. The government states the recommendation is implemented, detailing NISTA's PFI Contract Management Programme which provides support for contract expiry, asset condition surveys, expanded contract management support, and new guidance to be published in 2025.
HM Treasury