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The Private Finance Initiative (PFI) is a form of public-private partnership (PPP) in which local authorities can gain access to new or improved capital assets (most commonly, but not always buildings). Unlike traditional procurement the public sector does not buy the assets, but rather pays for their use, together with associated services (for example, security, cleaning, etc). Capital investment in the assets is made by the private sector which recovers its costs over a long contract period (often 25 years or more).
Other forms of PPP include Strategic Service Delivery Partnerships (SSDPs), concessions (e.g. toll roads) and Strategic Infrastructure Partnerships, such as the LIFT programme in the health sector and Local Education Partnerships (LEPs) in the Building Schools for the Future programme. Some PPPs may involve Joint Venture Companies. There is CLG guidance on SSDPs.
PFI credits
PFI credits are a measure of the private sector investment which will be supported by central government sponsoring departments. Issuing a PFI credit letter is a promise that PFI grant can be claimed once the project is operational, and the level of PFI credits determines the amount of grant.
A guide for local authorities who wish to apply for PFI credits is published annually. The current version is for 2008/09
PFI grants
Local authorities can apply for the PFI grant once their projects become operational. PFI grant for all new projects will be calculated as an annuity based on the level of PFI credits and the contract length.
Current grant determinations are:
- Local Government PFI Annuity Grant Determination (No.1) 2009 [No. 31/1352] (Adobe Acrobat 60kb)
- Local Government PFI Declining Balance Grant Determination (No.1) 2009 [No.31/1353] (Adobe Acrobat 35kb)
Current grant claim form:
- PFISG1 Annuity Claim Form for 2009/10 (Adobe Acrobat 30kb)
Authorities who wish to estimate the level of grant they might expect to receive can use the following template:
Local Authority PFI projects
A list of local authority PFI projects is updated regularly.
Projects at various stages of development as listed, including those which are operational, those in procurement and those where the business case is still being worked up. The list also shows total PFI credit allocations available to departments and some additional statistical analysis.
PFI Regulations
Regulations under the present and old capital finance regimes.
Local Government (Contracts) Act 1997
CLG Sponsored PFI programmes
- Fire & Rescue Services
- Housing
- Joint Service Centres
- A PFI Project Support and Intervention Strategy sets out the approach of the Department to monitoring, advice, facilitation and, if necessary, intervention in the development and procurement of PFI projects funded by CLG.
Other useful websites:
HM Treasury general PFI / PPP policy site - HM Treasury has responsibility for general PFI policy
Building Schools for the Future
Local Improvement Finance Trusts (LIFT):
Department of Health site
Community Health Partnerships siteThe 4ps (The Public Private Partnership Programme) - the Local Government body with expertise on PFI, PPPs and complex projects and programmes
Partnerships UK - a public private partnership with a public sector mission to support PFI and PPPs.
Enquiries to:
Central Private Finance Unit
Zone 4/F3
Ashdown House
123 Victoria Street
London SW1E 6DE
Tel: 020 7944 4228
Fax: 020 7944 4259CLG is not responsible for the contents or reliability of the linked web sites and does not necessarily endorse the views expressed within them. Listing should not be taken as endorsement of any kind. We cannot guarantee that these links will work all of the time and we have no control over the availability of the linked pages.
CLG can only offer an informal interpretation of legislation and it is for the authorities to seek their own legal and accounting advice.
Last updated on 1 June 2009
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