Financing Pfi Projects In The Credit Crisis And The Treasury S Response
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Financing Pfi Projects In The Credit Crisis And The Treasury S Response
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Author : Great Britain: National Audit Office
language : en
Publisher: The Stationery Office
Release Date : 2010-07-27
Financing Pfi Projects In The Credit Crisis And The Treasury S Response written by Great Britain: National Audit Office and has been published by The Stationery Office this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-07-27 with Political Science categories.
By setting up an Infrastructure Financing Unit, HM Treasury helped reactivate the lending market for private finance projects which was putting government PFI programmes in doubt as a result of the credit crisis. While the extra finance costs for projects in 2009 were value for money in the short term to stimulate the economy, the Treasury should not presume that continuing the use of private finance at current rates will be value for money. In line with policy on acting to stimulate the economy, the Treasury and other government departments gave priority to closing deals at the prevailing market rates, even if this meant the public sector paying more, and the banks carrying less risk. Analysis by the NAO suggests that higher financing costs increased the annual charge of PFI projects by six to seven per cent and that between £500 million to £1 billion of higher cost has been built in over 30 years, partly offset by an increased public sector share of refinancing gains. The NAO also considered whether reconsidering business cases would have improved value for money. The NAO found that this might have put policy objectives to give a boost to the economy at risk and would not have been a reasonable yardstick to assess the protection of value for money. The NAO recommends that there now be a thorough project by project review of the forward programme to apply more exacting and narrower criteria than applied to projects at the height of the crisis
Financing Pfi Projects In The Credit Crisis And The Treasury S Response
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Author : Great Britain: Parliament: House of Commons: Committee of Public Accounts
language : en
Publisher: The Stationery Office
Release Date : 2010-12-09
Financing Pfi Projects In The Credit Crisis And The Treasury S Response written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and has been published by The Stationery Office this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-12-09 with Business & Economics categories.
The 2008 credit crisis had an enormous impact on the Government's public infrastructure programme. Severe restrictions on bank lending at that time meant no sizeable Private Finance Initiative (PFI) contracts could be let. This affected the viability of a large number of infrastructure projects, including school and road building schemes, with a total investment value of over £13 billion. The Treasury's response was to make project finance available by lending public money on the same terms as the banks. However the Treasury did not put pressure on government-supported banks to either make lending available or reduce the extent of increased financing costs. Overall, bank financing costs increased by 20-33 per cent compared to bank charges before the credit crisis. This added £1 billion to the contract price, payable over 30 years, for the 35 projects financed in 2009. Other alternatives to the high cost bank finance were not properly explored during the credit crisis. Greater use of Treasury loans, or direct grant funding, could have put pressure on banks to lower their charges. Neither did the Treasury adequately explore how lower cost finance sources such as life insurance and pension funds could be encouraged to invest more in PFI projects. The Treasury also could have made more use of funding from the European Investment Bank. The appropriate mix of financing sources for future project contracts, including public and private finance, is an issue that needs serious reconsideration.
Lessons From Pfi And Other Projects
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Author : Great Britain: National Audit Office
language : en
Publisher: The Stationery Office
Release Date : 2011-04-28
Lessons From Pfi And Other Projects written by Great Britain: National Audit Office and has been published by The Stationery Office this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-04-28 with Business & Economics categories.
Lessons from the experience of using PFI can be applied to improve other forms of procurement and help Government achieve its aim of securing annual infrastructure delivery cost savings of £2 billion to £3 billion. To secure the best value for money from all types of procurement, the public sector needs to develop skills the NAO has identified. These are collecting better data to inform decision-making; ensuring projects have the right skills; establishing effective arrangements to test, challenge and, if necessary, stop projects; and using commercial awareness to obtain better deals. The case for using private finance in public procurement needs to be challenged more. Also, privately financed projects will often still be off balance-sheet which may continue to act as an incentive to use PFI. There has not been a systematic value for money evaluation of operational PFI projects by departments. So there is insufficient data to demonstrate whether the use of private finance has led to better or worse value for money than other forms of procurement. The Treasury and departments should identify alternative methods for delivering infrastructure and related facilities services to maximise value for money for government. The NAO welcomes the current plans of the Treasury and Cabinet Office to strengthen project assurance. The report highlights the need for independent challenge capable of stopping projects which do not give the prospect of value for money. This is particularly important as there is still a shortage of the skills needed to manage and oversee complex major projects.
Department For Education
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Author : Great Britain: Parliament: House of Commons: Committee of Public Accounts
language : en
Publisher: The Stationery Office
Release Date : 2012-05-11
Department For Education written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and has been published by The Stationery Office this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-05-11 with Education categories.
The Department for Education is distributing £56.4 billion in 2011-12 to schools, local authorities and other public bodies for the delivery of education and children's services in England. The Department has set out how it intends to provide Parliament with assurance about the regularity, propriety and value for money in an Accountability System Statement (the Statement) of which the Committee has now seen three drafts. Responsibility for value for money is shared by the Department with schools, academy trusts, local authorities, the Young People's Learning Agency and the Department for Communities and Local Government. However, the Statement does not yet clearly describe the specific responsibilities of each body, how these will interact, or how the Department will assess value for money across the entire education system. The Department relies on local authorities and the YPLA to exercise financial oversight over local authority maintained schools and academies respectively. However, oversight by some local authorities is currently weak and could worsen as many authorities reduce the resources they devote to overseeing their schools. There are also concerns about whether the YPLA will have the right skills, systems and capacity to oversee the rapidly increasing numbers of academies expected in coming years. More consistent requirements for data and data returns must be applied to all schools so that academic and financial performance can be benchmarked, and all schools can be held accountable. The Department needs to enforce these requirements more stringently, particularly given previous problems with lack of compliance
Rethinking Public Private Partnerships
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Author : Carsten Greve
language : en
Publisher: Routledge
Release Date : 2013-05-07
Rethinking Public Private Partnerships written by Carsten Greve and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-05-07 with Business & Economics categories.
The global financial crisis hit the world in a remarkable way in late 2008. Many governments and private sector organizations, who had considered Public-Private Partnerships (PPPs) to be their future, were forced to rethink their strategy in the wake of the crisis, as a lot of the available private funding upon which PPPs relied, was suddenly no longer available to the same extent. At the same time, governments and international organizations, like the European Union, were striving to make closer partnerships between the public sector and the private sector economy a hallmark for future policy initiatives. This book examines PPPs in the context of turbulent times following the global financial crisis (GFC). PPPs can come in many forms, and the book sets out to distinguish between the many alternative views of partnerships; a project, a policy, a symbol of the role of the private sector in a mixed economy, or a governance tool - all within a particular cultural and historical context. This book is about rethinking PPPs in the wake of the financial crisis and aims to give a clearer picture of the kind of conceptual frameworks that researchers might employ to now study PPPs. The crisis took much of the glamour out of PPPs, but theoretical advances have been made by researchers in a number of areas and this book examines selected new research approaches to the study of PPPs.
Pfi In Housing And Hospitals
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Author : Great Britain: Parliament: House of Commons: Committee of Public Accounts
language : en
Publisher: The Stationery Office
Release Date : 2011-01-18
Pfi In Housing And Hospitals written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and has been published by The Stationery Office this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-01-18 with Business & Economics categories.
The Department of Health and the Department for Communities and Local Government (the Departments) are responsible for sizeable portfolios of PFI projects covering hospitals and social housing. By April 2009 there were 76 operational PFI hospitals in England and over 13,000 homes had been built or refurbished through PFI. The letting of contracts and the responsibility for managing them is devolved to NHS Trusts and local authorities. The Departments are responsible for overseeing their PFI programmes and reporting to the public and Parliament on value for money. The Committee can find no clear and explicit justification and evaluation for the use of PFI in terms of its value for money. In many cases local authorities and Trusts chose the PFI route because the Departments offered no realistic funding alternative. Other concerns are central government's failure to use the market leverage that comes from overseeing multiple contracts, and the lack of robust central data to support effective programme management. It is clear that the implementation of PFI projects could be improved. Many PFI housing procurements have taken very much longer, and cost a great deal more, than originally planned. On hospitals, most are receiving the services expected at the point contracts were signed and are generally being well managed. There are, however, wide and unexplained variations in the cost of hospital support services, such as cleaning, catering and portering. Departments are not using their own buying power to leverage gains for the taxpayer.
Ministry Of Defence
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Author : Great Britain: Parliament: House of Commons: Committee of Public Accounts
language : en
Publisher: The Stationery Office
Release Date : 2012-02-10
Ministry Of Defence written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and has been published by The Stationery Office this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-02-10 with Technology & Engineering categories.
The Ministry of Defence (the Department) continues to struggle with managing its equipment programme on an affordable basis, resulting in the cancellation or deferral of major projects and a damaging impact on value for money. In 2010-11 the forecast costs to complete the 15 largest defence projects increased by £466 million. Since their original approvals the estimated costs of these 15 projects have increased by £6.1 billion and now stand at approximately £60 billion (an 11.4% increase). In aggregate these 15 projects are forecast to be completed 322 months later than originally planned. Projects approved since 2002 show significantly lower cost growth than those approved before this date, which is encouraging. Now the Department faces unpalatable decisions. Decisions to cancel or slow projects and to reduce equipment numbers have added significant long-term costs to the whole defence programme and to unit costs within the programme. Capability has been affected and this has all resulted in poor value for money. Large defence equipment projects have contributed disproportionately to overall cost growth. In the past, the Department has repeatedly failed to challenge unrealistically low estimates for the largest and most complex equipment projects from suppliers. The Department is still unable to set out openly the extent of the gap between income and expenditure it still faces, and how and by when any shortfall will be resolved. The report notes little progress in reducing the turnover of the Senior Responsible Owners (SROs), who oversee individual projects.
Hm Revenue Customs
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Author : Great Britain: Parliament: House of Commons: Committee of Public Accounts
language : en
Publisher: The Stationery Office
Release Date : 2011-12-20
Hm Revenue Customs written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and has been published by The Stationery Office this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-12-20 with Business & Economics categories.
HM Revenue & Customs faces a huge challenge to resolve long-standing problems with the administration of PAYE and tax credits while making substantial reductions to its running costs. The Department needs to stabilise its administration of PAYE following the problems encountered after a new processing system was introduced in 2009. It also needs to recover a significant amount of outstanding tax credit debt while minimising the amount of new debt being accumulated. While £900 million extra has been allocated to tackle tax avoidance, at the same time, following the 2010 Spending Review, the Department is required to reduce its running costs by £1.6 billion over the next four years. The Department has made progress in improving PAYE administration since the Committee's last examination of this area in 2010. However, as a consequence of the Department's handling of the 2009 transition to the new PAYE Service, it has had to forgo up to £1.2 billion of income tax underpaid from 2004-05 to 2009-10. Under current plans, it will take until 2013 before all processing backlogs are cleared and the new PAYE Service is operating as intended. The Department needs to focus on improving data quality in particular to sustain progress in PAYE administration. Without a clear plan for reducing tax credit debt, the level of uncollected debt will continue to rise to an estimated £7.4 billion by 2014-15. The Department has been forced to acknowledge that much of this debt will never be recovered from tax credit claimants, and recently wrote off some £1.1 billion of debt dating back to the introduction of the scheme.
Public Private Partnerships And The Law
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Author : Yseult Marique
language : en
Publisher: Edward Elgar Publishing
Release Date : 2014-08-30
Public Private Partnerships And The Law written by Yseult Marique and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-08-30 with Business & Economics categories.
This timely book examines the legal regulation of Public_Private Partnerships (PPPs) and provides a systematic overview of PPPs and their functions. It covers both the contractual relationships between public and private actors and the relationships be
Whole Of Government Accounts 2009 10
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Author : Great Britain: Parliament: House of Commons: Committee of Public Accounts
language : en
Publisher: The Stationery Office
Release Date : 2012-02-07
Whole Of Government Accounts 2009 10 written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and has been published by The Stationery Office this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-02-07 with Business & Economics categories.
In November 2011, HM Treasury published the first audited Whole of Government Accounts (WGA), covering the year 1 April 2009 to 31 March 2010 (HC 1601, ISBN 9780102975192). The Committee welcomes this major step forward in improving transparency and accountability and highlights some of the information it contains: at 31 March 2010 the government's public service pensions liability was around £1,132 billion; the present value of its future commitments under PFI schemes was £131.5 billion; the government wrote off £10.9 billion in unpaid taxes and expected to have to pay £15.7 billion for outstanding clinical negligence claims; cost of future nuclear decommissioning (£56.7 billion); the need for stronger accountability systems to secure effective responsibility for cost and value for money at local levels - academies, Free Schools, Foundation Trusts and GP consortia. But the WGA will only serve its purpose- showing what the government owns, owes, spends and receives - if it is timely and robust. The figures in the first audited WGA are too dated because Treasury took 20 months to prepare and publish the report. Treasury must address the issues that led the Comptroller and Auditor General to qualify his audit opinion on the WGA 2009-10. A key issue is Treasury's decision to deviate from accounting standards, by omitting Network Rail, the publicly owned banks, and various other government-controlled or owned bodies from the WGA. The Committee sets out a set of principles that future accounts should follow.