The UK has been a global leader in the implementation of PFI, with more than 716 projects established since the early 1990s, with a range of operating periods from 15-25 years.
To date, only 19 projects have achieved handback, equating to 2.6% of the market which puts into perspective the scale of the PFI handback ‘operation’ that awaits as we move forward within this decade.
England has the monopoly of the PFI market at 76% which in monetary terms equates to £42,017.60M of the overall PFI capital spend. Scotland have received £5,829.50M across 12% of the PFI market. Interestingly, there is a greater spend per head in Scotland than in England.
Early contracts are heavily impacted by poorly defined handback arrangements which will affect the handback process and quality of the asset. One aspect that needs consideration is whether there are sufficient funds remaining in the lifecycle funds.
The hare will race through handback returning the building and the staff to the public sector. The tortoise will consider the opportunity that handback presents and carefully craft an outcome that reflects strategic direction as well as contractual and commercial compliance.
