Many London boroughs are not prepared for the expiry of their private finance initiative (PFI) contracts and will struggle to prepare because of a lack of resources, a new report has found.
The report by not-for-profit company Future of London found that several boroughs are struggling to prepare for PFI contract expiry due to overstretched resources, including a lack of project management capacity and clear contract ownership within their organisation.
Over the next decade, many PFI contracts will expire across at least 20 London boroughs. These contracts, which account for three-quarters of all PFI contracts in the capital, represent nearly £6bn of payments remaining from boroughs to private sector operators.
The report, titled PFI Expiry: How London boroughs can get ahead and carried out in partnership with law firm Devonshires and construction consultancy Airey Miller, was based on two roundtables and interviews with officers and directors from 14 London boroughs.
It identified concerns about the increased costs of service delivery after Government PFI credits stop, and also worries about the pressure on local authority PFI reserves, which have not kept up with inflation, to manage the expiry process effectively.
