Source · Select Committees · Public Accounts Committee
Recommendation 15
15
Not Addressed
Most private finance contracts lack central monitoring, undermining effective management and value
Conclusion
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 billion in the Sizewell C nuclear 23 C&AG’s Report, para 3.29 24 Q 60; Correspondence from HM Treasury, 27 May 2025 25 Q 60; Government Major Projects Evaluation Review, Evaluation Task Force, April 2025 26 Qq 4 and 6; C&AG’s Report, paras 3.21-3.22 27 Qq 24 and 57 28 C&AG’s Report, para 1.8 11 power station.29 With the exception of PFI contracts, private finance contracts are not monitored centrally because responsibility for them rests with departments and sector regulators.30 Written evidence we received from Affinitext highlighted that the absence of complete, digitised and searchable contracts undermined effective contract management, preparation for assets to be handed back to the public sector at the end of a contract, and value for money assurances.31
Government Response Summary
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.
Government Response
Not Addressed
HM Government
Not Addressed
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 The government’s 10 Year Infrastructure Strategy sets out several of the main basic models available to deploy private finance into projects, many of which have been and continue to be highly successful in delivering infrastructure investment. 2.3 In general, while some model archetypes might be suitable for different markets or different asset types, the selection of a financing model will be highly dependent on the specifics of a given project (e.g. the risk profile, maturity of technology, and so on). The Treasury's preferred model for any type of infrastructure project is the one that offers the best value for money, and it appraises proposals on a case-by-case basis using the Green Book. 2.4 Contracting authorities should design their model with suitable provisions and appropriate risk transfer based on the specific project at hand ensuring value for money. This means that the appropriate model will often be a bespoke version of an existing basic model. NISTA provides advice and guidance to contracting authorities, and the Treasury teams and NISTA work together to implement the 10 Year Infrastructure Strategy including through considering how private finance can deliver the government’s infrastructure priorities. 2.5 The Treasury evaluates the costs and benefits of alternative options – including financing models – as part of the Business Case process to identify the preferred model for each project and to ensure value for money is achieved for each infrastructure investment.