§ Mr. FlightTo ask the Chancellor of the Exchequer (1) how much Government debt has been generated by private finance initiatives(a) as a percentage of GDP and (b) in total; [86675]
(2) whether the forecast net borrowing for this financial year includes Government liabilities generated by private finance initiatives. [86676]
§ Mr. BoatengForecasts of the Government's net borrowing are compiled in accordance with National Accounts concepts and methods, which are based on international rules (European System of Accounts—ESA95), that the Government are legally obliged to608W follow. Under these rules economic activity is measured by transactions, which are recorded according to the sector considered to be undertaking the transaction.
For an on-balance sheet PFI deal, the capital expenditure adds to public sector net borrowing, assuming that there are no off-setting reductions in other capital spending. For an off-balance sheet PFI contract, the capital expenditure does not affect public sector net borrowing. Professional accountants, in preparing the accounts of Government Departments, judge whether a PFI deal is on or off balance sheet. The National Audit Office, or a comparable audit body, audits these decisions.
The Government publish a full statement of expected PFI-related payments in the Budget, showing estimated PFI payments for the next 25 years. Service charge payments made by the public sector to the private sector score as public sector current expenditure in the year in which they are made.