Supplementary memorandum submitted by
HM Treasury
Question 48 (Dr John Pugh): St John's Bootle Benchmarking
exercise
At the hearing you also requested a note setting
out some details on the reason why St John's House Bootle PFI
Benchmarking exercise took 25 months.
In fact, this is addressed by the NAO in paragraph
2.13 of their Report, which sets out that: "In the case of
St John's House, Bootle, the benchmarking took 25 months as the
public sector rejected the proposed 16 per cent increase in the
price of services as this would have exceeded the cap on the services
element portion of the quarterly Unitary Service Charge."
In addition, as table 16 indicated there was
some difficulty in agreeing the comparative data for the benchmarking
exercise, and this may have also contributed to the timescale.
It should be noted that the proposed 16% price
increase was successfully opposed by the public sector and the
final outcome was that there was no change in the price and no
change to the services. As table 11 (p18) shows, the NAO's assessment
of this outcome was that it was likely to have achieved value
for money.
Question 94 (Mr Richard Bacon): Projection for
the aggregate future cash outlays expected under Private Finance
Initiative contracts
You asked us to break this down into projections
for the total of expected annual payments for PFI deals:
EXPECTED PAYMENTS
UP UNTIL
2031-32
The aggregate amount of cash to be paid out
under the unitary charge payable on all signed PFI deals (subject
to benchmarking or market testing of the relevant portions of
the contract) covering the period up until 2031-32 is published
in the Budget document and Pre-Budget Report each year. The relevant
table from this year's Budget is Table C19:
Table C19
ESTIMATED PAYMENTS UNDER PFI CONTRACTS—MARCH
2007 (SIGNED DEALS)1
| | |
|
| £ billion | |
| |
| Projections | |
| |
| | |
|
| 2006-07 | 6.9 | 2019-20
| 5.8 |
| 2007-08 | 7.3 | 2020-21
| 5.9 |
| 2008-09 | 7.8 | 2021-22
| 5.5 |
| 2009-10 | 8.2 | 2022-23
| 5.4 |
| 2010-11 | 8.5 | 2023-24
| 5.4 |
| 2011-12 | 8.6 | 2024-25
| 5.4 |
| 2012-13 | 8.7 | 2025-26
| 5.2 |
| 2013-14 | 8.8 | 2026-27
| 5.0 |
| 2014-15 | 8.8 | 2027-28
| 4.8 |
| 2015-16 | 8.8 | 2028-29
| 4.5 |
| 2016-17 | 8.9 | 2029-30
| 4.2 |
| 2017-18 | 8.2 | 2030-31
| 3.8 |
| 2018-19 | 5.8 | 2031-32
| 3.4 |
| | |
|
| |
| |
1 The figures between 2006-07 and 2017-18 include estimated
payments for the LUL PPP PFI contract. These contracts contain
periodic reviews every 7.5 years and therefore the service payments
are not fixed after 2009-10.
These projections are in nominal terms and so incorporate
the inflation assumptions built into contracts.
EXPECTED PAYMENTS
AFTER 2031-32
The projected aggregate PFI payments for 2032-33 and 2033-34
are £3.0 billion and £2.7 billion respectively. HM Treasury
does not hold data for the period after 2033-34, and so does not
make projections beyond that date.
TOTAL FUTURE
PFI PAYMENTS
The numbers presented here are the projected aggregate future
cashflows under signed deals. The figures are in nominal terms,
not today's money, and thus adding them together does not produce
a meaningful figure. For the avoidance of doubt it would not be
correct to refer to these projections as additional to Public
Sector Net Debt (PSND), not least since many of these liabilities
(where the relevant project is on the public sector's balance
sheet) are already included within PSND.
| 
