Private/Public Finance Initiative

Treasury written question – answered on 15th June 2005.

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Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Opposition Deputy Chief Whip (Commons)

To ask the Chancellor of the Exchequer

(1) which circumstances would (a) qualify private finance initiative to be considered for and (b) exclude it from being considered for public borrowing requirements;

(2) how much public finance initiative funding has been written off since its inception.

Photo of John Healey John Healey The Financial Secretary to the Treasury

The Government follow rules based upon internationally agreed standards of commercial accounting practice, policed by the independent accounting watchdog, the FRAB (Financial Reporting Advisory Board), when accounting for PFI transactions.

All PFI deals are subject to audit by the NAO or another UK audit body. Where they judge that assets in PFI deals should be on a public authority's balance sheet the value of those assets is scored as public sector net borrowing.

Approximately half of all signed PFI deals are judged under this process to be 'off-balance sheet'.

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