PFI Contracts

Given the length and scope of PFI contracts, change is inevitable, so the effective administration of PFI change management, in terms of both the change process and its associated costs, is fundamental to successful PFI contract management. In this article…

One practically inevitable fact of life is that when drafting contract terms for complex projects and services, the less clear your understanding is of the requirements of the project, the greater the chance of poor contractor performance behaviours. Two cases…

In this article we explain the why, what and how of the PFI Operations Manual – the cornerstone of effective and consistent day to day contract management. The typical length of a PFI contract (20-30 years), makes it extremely unlikely…

In this final article on the recent National Audit Office (NAO) report surveying the public sector’s readiness for responsibility over hundreds of PFI contracts as they come to an end, we look at the recommendations that were put forward to…

A Private Finance Initiative (PFI) is a public private partnership, used to finance the creation and maintenance of major public sector projects in the UK since the 1990s. In 2018, the government announced that it would no longer be using…

With the elections on the way, the NHS has predictably become a political football with accusations and counter accusations flying around in the mediasphere. One of the major points of contention is private-sector involvement in this much-loved public institution. The…

Is this the end for PFI (private finance initiatives)? Brought in by John Major in 1992, extensively utilised by the Blair government and every occupant of No. 10 since, no matter their political stripes, PFIs have, in recent years, become…

PFI (private finance initiative) – the mechanism for funding major infrastructure and construction projects, where completed assets remain, at least initially, in private ownership, and the cost of their construction is paid off, often with significant interest, over many years…

Is this the end for PFI? In May this year an interesting article came out in the GCR (Global Construction Review) on the CIOB (Chartered Institute of Building) website, titled ‘Bye-bye, PFI: UK signals effective end of private finance initiative’.…

The day to day pressures of managing a PFI contract tends to lead one to focus on operational issues, yet the importance of devoting considerable time and energy to keeping on top of PFI costs cannot be undervalued. Take a…

Since the revelations of the Labour Conference in September, analysts and pundits have been asking some important questions. They include, in this austerity lashed economic climate, where does Labour believe the potentially hundreds of billions will come from to pay…

‘PFI deals will cost taxpayers £209bn over next 35 years’, ‘One in five PFI assets will remain in private, rather than public ownership even after the contracts have ended’, ‘Every adult in Britain faces a debt of £4,119 to pay…

You will know from experience, as we do, that size and term can impact on the complexity of a project and the relationships that govern such a venture. And, as PFI agreements by their very nature tend to be sizeable…

Two weeks before the 2015 general election, David Cameron visited Halifax to assure residents that the A&E department of the embattled Calderdale Royal Hospital would not face closure. “After the election we want to do what we’ve done with other…

The clue is in the name – private finance is at the heart of PFI. It is what distinguishes PFI from other forms of contract and other ways of providing public assets. What this means, in practice, is that whoever…

The complexity and length of PFI contracts and the upward pressure on the unitary charge (due to inflation, the cost of contract variations and the contractors’ desire for profit, among other things) mean that multi-million pound deficits can accumulate if…

PFI indexation, as with other issues affecting affordability, is inextricably linked with the operational side of the contract, so those responsible for PFI contract management must take responsibility for dealing with indexation, and not leave it just to the finance…

The payment mechanism is the primary means for ensuring a PFI contractor performs. PFI contracts distinguish between ‘Availability’ and ‘Performance’ and to control costs, it is therefore essential that clients keep track of Availability and Performance deductions in PFI contracts.…

The need to control PFI costs is of paramount importance to any public sector organisation, yet often those responsible for PFI finance and the contract arrangements can work ‘in silo’ creating (inadvertently) a lack of cost control. Collaborative working, therefore,…

As most PFI contracts span a period of 20 to 30 years, they tend to have built-in provisions for periodic price realignment, based on market rates for similar services. Although the responsibility for managing this process rests with the contractor,…

With HM Treasury now allowing procuring organisations to keep all the savings they achieve from effective management and the realignment of PFI contracts, this provides an ideal opportunity for you to review the governance, structure and scope of your operational…

The PFI monitoring calendar is an essential tool for you, as the client, to stay on top of the responsibilities of your PFI contractor and its sub-contractors, as well as your own responsibilities. In this article we focus on how…

Although it sounds like a mundane issue, a good PFI document management and filing system is an essential tool for effective contract management. The need for an efficient filing system for management of any complex contract should be self-evident; however,…

The thought of attending yet another meeting with your PFI contractor may seem like a pointless chore… you may feel that there’s too much talk and too little action by your contractor thereafter. Yet, there are ways in which you…

In PFI assets with considerable public or end user traffic, such as libraries, leisure centres, schools, offices and prisons, there is a high risk of regular incidents of vandalism and other types of damage caused by client-related parties. The costs…

Our focus is on operational PFI Contracts: How to get the most from partner changes. With most PFI contracts having an average lifespan of 20 to 30 years, it is inevitable that some of the parties will change during that…

Despite the mounting pressure of ever more limited budgets and strict HM directives to actively pursue savings in PFI contracts, it is surprising how few organisations have completed a thorough review of their PFI-related costs. Recent discussions with senior managers…

The adverse financial ramifications of large PFI contracts that were negotiated in healthier economic times are only now becoming clear to many public sector organisations across the UK. Such agreements were entered into with the best of intentions and were…