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Departments: Private Finance Initiative

Volume 458: debated on Monday 12 March 2007

To ask the Secretary of State for Education and Skills (1) for which future projects his Department is considering a private finance initiative deal; what the estimated life time value is of each potential contract; and what period each will cover; (125186)

(2) what percentage of his Department’s budget was taken up by private finance initiative commitments in each of the last 10 years for which information is available; and if he will make a statement;

(3) what percentage of his Department’s budget will be taken up by private finance initiative commitments in each of the next 10 years, assuming that the budget grows in line with the Treasury’s estimates for gross domestic product over the period; and if he will make a statement.

PFI credits relate solely to schools capital funding. Future PFI credits available to the Department as part of its capital baseline are largely assigned to the Building Schools for the Future (BSF) programme. PFI contracts usually cover a 25 to 30 year period. After this, the buildings will normally transfer to the local authority which is the signatory to the contract. Partnerships for Schools, our delivery partner for BSF, is working with each local authority which has joined the programme to establish which school projects are suitable for investment through PFI. This is decided on value for money grounds and is usually for those projects where the school is to be largely rebuilt, rather than refurbished.

Percentage budget figures for PFI credits over the last 10 years to 2006-07, and planned for the years 2007-08 to 2010-11, are set out in the following table. The Department has no plans beyond the next spending review period ending 2010-11. The PFI percentage figure is established by dividing PFI credits by the total schools capital funding baseline, including PFI credits.

Percentage

1997-98

0

1998-99

12

1999-2000

25

2000-01

17

2001-02

19

2002-03

26

2003-04

20

2004-05

22

2005-06

22

2006-07

22

2007-08

20

2008-09

20

2009-10

19

2010-11

16

The changes in the PFI percentage reflect, from year to year, the different rates at which PFI credits and other allocations have increased.