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Private Finance Initiative (PFI) And PF2 - Good Or Bad - National Audit Office Report

21st January 2018

This report presents information on: the rationale, costs and benefits of the Private Finance Initiative (PFI); the use and impact of PFI, and ability to make savings from operational contracts; and the introduction of PF2. There are currently over 700 operational PFI and PF2 deals, with a capital value of around £60 billion. Annual charges for these deals amounted to £10.3 billion in 2016-17. Even if no new deals are entered into, future charges which continue until the 2040s amount to £199 billion.

We present information on the programme as a whole and do not seek to form a view on the model or individual projects. This briefing was prepared prior to the announcement on 15 January 2018 that the construction company Carillion was in liquidation.

Full Report HERE

Scotland has a different system - NPD (Non-Profit Distributing) although still has PFI projects from earlier years.

The Non-Profit Distributing ("NPD") model is simply an alternative funding structure for public-private partnership ("PPP") projects that would previously have been carried out under the Private Finance Initiative ("PFI"). It could be adopted by any public authority in the UK (subject to normal approvals processes) and does not require any new legislation.

Many of the perceived problems with PFI stemmed from the private sector receiving surplus "windfall" profits on top of their anticipated rate of return, and also loss of public control over public sector assets.

More on this at https://www.blakemorgan.co.uk/news-events/news/non-profit-distributing-has-scotland/