Select committee: Public Accounts Committee

Recommendation 22

39th Report - Government’s use of private finance for infrastructure Published 11 Jul 2025 Addressed to HM Treasury
Recommendation (the committee's words)
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 is fair that the higher the risk, the higher the return.50 Not all risks can or should be transferred to the private sector because the cost of inappropriate transfer of certain project risks to the private sector could be disproportionately high, as ultimately, the government may have to pick up those risks, including completion of projects, if the private sector partner fails or is unable to deliver to the requirement. A lack of 44 Qq 10-11 and 33; C&AG’s Report, para 2.17 and 2.20-2.21 45 Qq 3, 11-13 and 73 46 Qq 32-33 47 Qq 32 and 68-69 48 Q 32 49 C&AG’s Report, para 3.2; Committee of Public Accounts, Private Finance Initiatives, Forty-Sixth Report of Session 2017–19, HC 894, June 2018, p 13 50 C&AG’s Report, para 3.16; C&AG’s Report, Equity investment in privately financed projects, Session 2010–12, HC 1792, February 2012, p.11; Committee of Public Accounts, Private Finance Initiatives, Forty-Sixth Report of Session 2017–19, HC 894, June 2018, p 17 15 guidance in quantifying risk for PFI schemes, for instance, helped to fuel some misalignment between the additional costs of PFI, the private sector’s return on investment (which was considered disproportionately high), and the actual level of risk incurred.51 For some other types of financing models, the government sought to ensure that excessive risk did not deter private investment, such as in the case of the Carbon Capture, Usage and Storage (CCUS) programme. The private sector invested significantly in CCUS after the Department for Energy Security and Net Zero applied lessons learned from previous failed attempts to launch CCUS in the UK and created business models that allocated costs and risks effectivel

From: Public Accounts Committee, 39th Report - Government’s use of private finance for infrastructure (HC 821), 11 July 2025

Government response

Latest Treasury Minutes progress report to the Committee of Public Accounts on the Thirty-ninth Report of Session 2024-26

The government responded to the whole report on 4 June 2026 (deadline 11 September 2025).

Read the government's response ↗ Report an error

Treasury minutes: Government response to the Committee of Public Accounts on the Thirty-ninth report from Session 2024-26

Published 15 October 2025.

Summary written by Accountability Index from the government's response. It is not the government's own words.

The government states that it "agrees with the Committee's recommendation" in each of the recommendations set out in the response, describing some as implemented and others as having target implementation dates between October 2026 and May 2027.

  • On the pipeline, the government says the recommendation is implemented, citing the Infrastructure Pipeline published by NISTA in July 2025, with updates "every 6 months", and NISTA has written to the Committee alongside the Treasury Minute.
  • On financing models, the government agrees but says the preferred model is "the one that offers the best value for money", appraised "on a case-by-case basis" using the Green Book.
  • On a central database, the government agrees with a target implementation date of May 2027. It will expand the Pipeline over time and "explore whether" the additional information sits best there or in a parallel product; the Pipeline would not include legacy PFI or commercially sensitive information.
  • On risk allocation, the government agrees with a target date of May 2026, saying the Treasury and NISTA "will set out further guidance by May 2026" on contract and performance management and on resetting infrastructure projects.

Read the government's response ↗ Report an error