Source · Select Committees · Public Accounts Committee
Recommendation 2
2
The IPA does not yet have the data it needs to fully understand the challenges...
Conclusion
The IPA does not yet have the data it needs to fully understand the challenges of managing the expiry of PFI contracts. The PFI contract is central to understanding the potential expiry risks an authority may face. However, these are long, complex documents which have been subject to multiple revisions over time, as many as 75 variations in one example. An authority may not hold a complete version of the contract, with either part or all of it lost. The contracts are not always easily accessible, sometimes being held on older technology such as CD-ROMs. A lack of standardisation in the early PFI contracts means that the clarity of each contract’s expiry clauses can vary, exposing authorities to different challenges depending on the contract’s age. The IPA does not hold a central registry of all PFI contracts as it does not consider creating this to be value for money. It has held discussions with key departments about introducing registries, but these are not yet widely in place. Instead, the IPA collects and publishes limited information on each of the 700 contracts, covering the capital value of the project, annual payments, the date the contract was signed and contract length. This does not include the date the contracts will expire. The IPA has started to collect contracts via its health check tool, but this is on a small scale. Recommendation: The IPA should write to the Committee within 3 months with an update on the thematic PFI expiry challenges that it has identified following its 6 Managing the expiry of PFI contracts review of 55 contracts and how it proposes to address them. In addition to this, the IPA should compile a central list of all PFI expiry dates to help authorities prepare for their conclusion.
Government Response
Acknowledged
HM Government
Acknowledged
2.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2021 2.2 The IPA will write to the Committee setting out the emerging themes from all of the PFI contract expiry health checks that have been completed and how the issues raised will be addressed. 2.3 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2021 2.4 Through the annual PFI data collection exercise, the IPA collects data on the date of expiry of PFI contracts. The annual data collection is a significant undertaking and the IPA is reliant on departments providing accurate and comprehensive information.