Recommendation 24

The authority is responsible for managing the PFI contract until expiry, at which point it inherits the assets.54 In some instances, ownership of the PFI assets can transfer between different public bodies before the contract expires, creating a potential conflict between those who will own the assets in the future, and those who are responsible for their management now. We asked the IPA how this was expected to work, particularly in areas such as the education sector. For example, an authority—usually the local authority—signed a PFI contract for a school and remained responsible for the contract until its expiry. The original contract would have stated that, on expiry, ownership of the school passed to the local authority. But in some cases, during the contract, the school was converted to an academy run by an independent trust funded by the Department for Education rather than the local authority. The NAO found that a local authority could find itself in a position that it still had to manage the PFI contract, but on expiry, the school would be transferred over to the academy trust.55