Infrastructure could be left in a worse condition when PFI ends, watchdog warns

By Laura Sharman | 05 June 2020

Many local authorities have underestimated the time, resources and complexity involved in managing the end of PFI (Private Finance Initiative) contracts, the public spending watchdog has warned today.

In a new report, the National Audit Office (NAO) warned this could result in assets being returned back to councils in a worse condition than agreed in the contracts, leading to extra costs for repairs and maintenance.

There are currently more than 700 PFI contracts, with most expiring from 2025.

The report called on the Government to take a more strategic or consistent approach to managing PFI contracts as they end.

Head of the NAO, Gareth Davies, said: 'With the bulk of PFI contracts expiring from 2025 onwards, there is still time for government to make changes that will help public sector bodies to exit from contracts successfully.

'If government does not provide strategic support and public bodies do not prepare sufficiently, there is a significant risk that vital infrastructure will not be returned to the public sector in the right condition and taxpayers and service users will bear the brunt of additional costs and service disruption.'

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