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This publication provides information about Private Finance Initiative (PFI) and Private Finance 2 (PF2) projects at 31 March 2022. It is published in line with HM Treasurys commitment to provide transparency regarding PFI and PF2 projects.
The Infrastructure and Projects Authority (IPA) collates this on behalf of HM Treasury. This publication only includes projects that are delivered or supported by departments and devolved administrations, and procured under the standard PFI and PF2 contract terms.
Other forms of PPP, such as NHS projects under the Local Improvement Finance Trust (LIFT) programme, those procured under the non-profit distributing (NPD) and hub models used in Scotland and the Mutual Investment Model in Wales, are not covered in this publication.
The information is provided by the central government departments and devolved administrations that have procured or sponsored projects. The contracting public sector entities for most projects are local authorities, NHS Trusts and other arms length bodies.
Where there are gaps in the data, this is because it has not been provided by the department and/or contracting authority responsible for the project. The data in this publication is not audited by HM Treasury or IPA, although IPA continues to work with departments to improve its quality and reliability.
At Budget 2018, the Chancellor announced that the government would no longer use PFI or PF2 for new projects as it was considered inflexible, overly complex and a source of significant fiscal risk to government. This policy does not affect the devolved administrations. Due to this change in policy, this portfolio consists of a decreasing number of projects which each have a diminishing number of years left in contract. As a result, the portfolio represents a decreasing amount in financial liabilities for the public sector.
About the Private Finance Initiative and Private Finance 2
PFI and PF2 are forms of Public Private Partnerships (PPPs). Public Private Partnerships (PPP) are long-term contractual arrangements between a public sector entity and a private sector provider.
The private sector provider is engaged to design, build, finance, maintain and operate infrastructure assets and related services. The risks associated with construction delay, cost overrun and maintenance of the asset are transferred to the private sector partner.
The public sector entity does not pay for the asset during construction, as the associated costs of construction are financed by the private sector. Once the asset is operational and services are being provided the public sector entity pays a monthly fee sometimes referred to as a unitary charge to the private sector provider. This payment includes the costs of construction, financing costs, lifecycle replacement expenditure, maintenance and services.
The payment is subject to performance, which means that payments are reduced if services are not delivered to the standards set out in the contract. This form of payment mechanism provides an incentive for the private sector provider to meet their performance obligations and underpins the transfer of risk to the private sector.
PPPs have been used to deliver investment in infrastructure across a wide range of sectors including hospitals, schools, roads, prisons, waste management and energy-from- waste infrastructure, housing, and military accommodation and equipment.
Until 2012, PFI was the governments preferred model of PPP. In 2012, PFI was replaced with PF2 in response to c