Think Tank: Provision of FM in PFI

Think Tank: Provision of FM in PFIs – is it sustainable any more?

Question Title

* 1. Last month the UK’s spending watchdog, the National Audit Office (NAO), published a report highlighting just how little evidence there is that Private Finance Initiatives (PFIs) offer value for money for taxpayers.

The report was notable for its timing, coming close on the heels of the collapse of Carillion, the support services and construction giant which held a significant number of key PFI contracts.

Carillion's demise has placed a spotlight on state outsourcing and contracting. PFI deals have been criticised for the ‘front loading’ of financial returns at the beginning of projects, with ongoing maintenance and management subsequently affected by insufficient funding further into the contract term. Provision of service years after construction is compromised by fundamental mismatches between budgets and service level agreements.

What is the practical experience of FM’s working on PFI contracts? Do contractors who take over from original PFI consortium members typically make a success of the contract? How do PFI arrangements vary and can the model ever work the way it was intended? How broken is the link between FM and construction, especially when it comes to PFI contracts?

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Our key question is this: From an FM perspective, how damaged is the PFI concept: