To ask Her Majesty's Government what plans they have to review the costs resulting from private finance initiative road maintenance contracts agreed by Highways England; and what assessment they have made of the adequacy of the level of service provided by those agreements.
Highways England has no plans to fundamentally review the terms and conditions of its private finance initiative (PFI) road maintenance contracts, including the costs payable under those contracts.
Highways England has previously reviewed its PFI contracts and concluded that cancelling or attempting to change them is unlikely to offer value for money. It should be noted that eight of Highways England’s eleven contracts in place are due to end in 2026/27.
Highways England manages the costs due to its PFI providers strictly in accordance with the contracts and has taken advantage of cost saving opportunities where possible, for example through project re-financings. In 2018, the largest of its PFIs, the M25 contract, was refinanced achieving annual savings for each year of the remaining contract period of around £10 million.
Highways England undertakes monthly and annual performance and financial assessments to ensure all charges levied by PFI Companies are compliant with the service level that is required to be provided under the contract.
Should service levels not be achieved, then in line with contractual payment mechanisms, deductions are applied and appropriate mitigating actions agreed to address any deficiencies.