Source · Select Committees · Public Accounts Committee
Recommendation 29
29
Accepted
Public bodies unprepared for PFI expiry despite extensive NISTA guidance and data.
Conclusion
The NAO noted in its latest report on Private finance for infrastructure that while there has been some progress made, much remains unchanged, with public bodies continuing to show a lack of preparedness for contract expiry – particularly for long-term contracts.68 We asked Mr Dalgleish how effective he thinks the government is at managing PFI or Public Private Partnership contracts in general. He told us that a large amount of good work has been done by what is now NISTA in terms of producing guidance, however, there was now a large amount of data and guidance for public bodies to try to digest, particularly by public bodies who also cannot afford good contract management capability in the first place.69
Government Response Summary
The government agrees with the committee's observation. NISTA has an ongoing PFI Contract Management Programme supporting authorities with expiry planning, asset condition assessment, and contract management reviews. NISTA will also publish new contract and performance management guidance later in 2025.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 NISTA, formerly IPA, set up a PFI Contract Management Programme in 2020 to support contracting authorities managing their PFI projects. NISTA’s Contract Management Programme supports authorities in a number of ways, including: • Expiry: NISTA supports contracting authorities with projects approaching expiry through training, guidance, direct advice and support and assurance. Working alongside departments, NISTA will engage with contracting authorities around seven years from expiry to set out all the expiry-related resources available and will provide an early support package to help ‘kick-start’ expiry planning. • Asset Condition: Following on from the publication of the Asset Condition Playbook, NISTA will undertake surveys across a wide-ranging assets which will provide data to better understand the assets in the PFI legacy portfolio and drive improvement in asset condition, It also gives NISTA the opportunity to improve central support for public bodies in assessing the state of their privately financed assets. • Contract Management Support: NISTA is expanding its engagement across the legacy PFI portfolio through the introduction of contract management support reviews for operational projects. NISTA is also broadening the range of skills in its pool of PFI experts to ensure that it can provide direct support to public bodies across a range of disciplines, including technical, commercial and financial. • New Guidance: NISTA will be publishing contract and performance management guidance later in 2025 to help contracting authorities improve their management of the contract and performance. This will address prior concerns raised by the NAO and the Committee and, in turn, strengthen authority’s abilities to enforce contract terms including on asset condition.