To ask the Secretary of State for Work and Pensions (1) for which future projects his Department is considering a private finance initiative deal; what the estimated lifetime value of each potential contract is; and what period each will cover; (125187)

(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. (125193)

The Department will consider PFI as an option when assessing the best value for money route to deliver its services. The Department for Work and Pensions uses a PFI route to obtain estates services under the Private Sector Resource Initiative for the Management of the Estate (PRIME) contract. PRIME is a 20 year PFI partnership deal, competitively let to Trillium (now Land Securities Trillium) on 1 April 1998. The deal involved the transfer of ownership and management of the majority of the then Department of Social Security premises to the private sector. Following the creation of the Department for Work and Pensions, PRIME was expanded in 2003 to cover ex-Employment Service estate. The Department secured a range of important new value for money mechanisms, bringing the deal in line with new Government guidelines for PFI deals.

The Department currently has no plans to use PFI in new areas, but the option will be considered for future services, except IS/IT which under Government policy are not considered suitable for PFI.

The percentage of the Department’s total budget taken up by PFI commitments in each of the years since the Department was formed in 2001 is shown in the following table.

The forecast percentage of the Department's total budget that will be taken up by PFI commitments in each of the years to the end of the Comprehensive Spending Review 2007 period is shown in the following table. In line with Treasury guidance it is not considered appropriate to model the Department’s budget beyond 2011 based on the gross domestic product projections.

In line with Treasury guidance the total budget figure comprises both the Department’s Delegated Expenditure Limit and Annually Managed Expenditure. However, it should be noted that this Department’s Annually Managed Expenditure largely covers the cost of benefit payments; it is not therefore a potential target for PFI in the way that other departments expenditure might be, for example deals for bridge or school building or maintenance.