Recommendation 18

Local Partnerships explained that asset condition surveys are the most critical aspect of the expiry process as they tell the authority whether or not the assets are in a fit state. These surveys should identify the amount and cost of any rectification work required before expiry. Local Partnerships highlighted that if the surveys were completed too close 39 Q 36; C&AG’s Report, paras 2.7, 3.29 40 Qq 34, 44; C&AG’s Report, paras 3, 2.7 41 C&AG’s Report para 2.8–9, 2.11–12 42 Q 85; C&AG’s Report, paras 2.13–2.15 43 Q 39 16 Managing the expiry of PFI contracts to the end of a contract, there could be insufficient time to remedy any defects identified.44 The IPA told us that the Treasury’s standard PFI guidance recommended surveys should be conducted 18 months to two years in advance of the contract’s expiry, which the IPA believed is too late. The IPA recommended that health check reviews take place seven years before the expiry of the contract, and that this could include requiring an asset condition survey.45 In its written evidence to us, Leeds City Council was concerned that there may not be enough technical experts to complete these surveys, and that creating a “lucrative new industry overnight” may create risks such as surveyors being under- qualified, inadequate surveys being produced in order to quickly move onto the next job or high prices due to lack of competition.46