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March 2016
PPP disclosure
A view from the UK audit office

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Contents
• Disclosure during the project life
• Changes under PF2
• Themes from NAO work
• Appendix
• NAO recommendations regarding data
• Examples of NAO analysis using different
data sources

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Disclosure (procurement, construction)
Procurement phase Construction phase
National
Infrastructure
Plan and
Pipeline
Tender documents PFI/PF2 procurement database
and project trackers
Departmental
transparency data
Project specific websites
(some large projects)
 Initial information - encourage interest from potential bidders for work
 PFI/PF2 project trackers produced by HM Treasury
 Some large projects provide information during the construction phase
Trade journals/websites

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Disclosure (operational stage)
National
Accounts
Financial accounts HMTreasury
databaseGovernment SPV
Project company
accounts
Aggregated data Project specific
Reconciliation
required
 Information on PFI liabilities (ESA10 vs IFRS)
 Departmental accounts - finance, operational
cost split. Performance data in some cases
 Whole of Government Accounts aggregate all
Departmental accounts
PFI
database
 SPV accounts
 Useful information
on financing
structure and costs
 Inconsistent
reporting
 Data on future
commitments, capital
value and key dates
 Other PPPs not
included
European
System of
Accounts
Departmental
& WGA (IFRS)

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Changes under PF2
• Business case approval tracker
• Private sector to provide forecast and
actual equity returns data
• Access to performance information
through membership of board
• Annual report with project and financial
data on all PF2 projects
• Improved information provisions within
standard contract
• Open book approach – facilitate sharing of any surplus
lifecycle funding
• Control total for all PFI/PF2 projects – Office for Budget
Responsibility to report on.

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Themes from previous NAO work
• The more data the better! (but there are costs)
• Commercial sensitivity vs public interest
• Accurate and standardised data allows
comparisons between projects and
procurement methods.
• Increased access to agreed financial terms (debt and equity)
of private finance deals to improve value for money.
• Central collation of data
• Transparency and comparability of capital
spending data (both PPPs and traditional
procurement)
• Investor returns following equity sales

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Appendix

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NAO recommendations regarding data
The Choice of Finance for capital investment (2015) https://www.nao.org.uk/report/the-choice-of-finance-for-capital-investment/
• Improve the transparency of capital spending data. Trends in historical and forecast capital investment,
and in the mix of financing and funding models, would be more readily observable if government reviewed
the various public data sources and increased their consistency and completeness, which may support
long-term planning.
• Improve decision-makers’ access to the terms of private finance deals. Central collection and
distribution of financial close data, including all PFI and consumer-funded PPP projects, could improve the
government’s understanding of the relationship between project risks and cost of capital, reveal more
opportunities for savings and could be incorporated into refreshed value-for-money assessment guidance.
• Facilitate direct comparisons between the performance of similar projects with different financing
choices. Detailed comparisons between the benefits and costs of alternative procurement decisions, such
as individual cost items, asset quality and performance, and maintenance standards, could improve
decision-making and increase confidence in the value-for-money assessment and benefits of long-term
contracts with private sector partners.
Equity investment in privately financed projects (2012) https://www.nao.org.uk/report/equity-investment-in-privately-financed-projects/
• The Treasury should…. be transparent about investors actual risks and rewards, to enable proper
assessment of the value for money being achieved from using investors.
• The Treasury should establish with investors a standard form of disclosure so that, on each change of
shareholder, authorities become entitled to equity sales data sufficient to judge the rate of return to the
seller. Authorities should regularly use their contractual rights to obtain up-to-date financial information from
project companies.
Lessons from PFI and other projects (2011) https://www.nao.org.uk/report/lessons-from-pfi-and-other-projects/
• Greater focus should be given to the types of data that should be gathered to improve decision-making, who
should collect them and the cost of collection.

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HMT PFI database as a data source

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Financial accounts as a data source
• Data from Departmental accounts, Whole of Government Accounts
and SPV accounts was used in our Choice of Finance report