HC Deb 24 October 2001 vol 373 cc288-9W
Mr. Laws

To ask the Secretary of State for the Home Department how many PFI transactions have been overseen by his Department in each of the last 10 years; what his estimate is of the cost savings made in each of these transactions in comparison with the public sector alternative; what the outstanding payments to be made in relation to these transactions are for each of the next 15 years; and if he will make a statement. [5732]

Beverley Hughes

From the best information available, I list the PFI transactions overseen in the last 10 years:

Transaction/Project title Estimated cost saving1 (£ million) Outstanding payments
Rainsbrook (Onley) Secure Training Centre 25.2
Hassockfield (Medomsley) Secure Training Centre 29.5
HMP Forest Bank 30.0
Her Majesty's Prison Service (HMPS) Heat Energy Services Tranche 1 3.3
Her Majesty's Young Offender Institution (HMYOI) Ashfield 19.0
Passport Application Support System-Front End 4
Passport Application Support System-Back End 4
Medway (Cookham Wood) Secure Training Centre 521.9
Immigration and Nationality Directorate (IND) Casework Programme 6
HMP Parc 53.0
HMP Lowdham Grange 30.0
HMP Altcourse 1.5
1 Published guidance on Public Sector Comparators notes that: "Accounting Officers should not rely solely on a straight comparison of a Private Finance Initiative (PEI) bid to its Public Sector Comparator (PSC), which should never be regarded as a pass/fail test but instead as a quantitative way of informing judgment". (Treasury Taskforce Technical Note No. 5: How to construct a public sector comparator).
2 Details of individual payments to Contractors under Private Finance Initiative contracts are usually regarded as commercially confidential. Aggregate figures of estimated payments under all Private Finance Initiative contracts for the years 2001–02 to 2025–26 were published in Table C18 of the Budget 2001 "Red Book".
3 The value of the Criminal Records Bureau (CRB) contract and therefore that of outstanding payments, is entirely dependant on demand and so cannot be forecast with any greater accuracy. At this stage, before the Bureau has become fully operational, estimated cost savings cannot be calculated.
4 It is unlikely that there will be any savings compared with the previous passport production operation. Following the passport problems of 1999, United Kingdom Passport Service (UKPS) embarked on a large number of initiatives to improve the service. These resulted in major changes to the system and associated hardware and the requirement of the PEI partners to increase all their resources to match capacity. The delay to the implementation of the system at all offices has delayed the income stream for both partners.
5 A PSC was not calculated on the grounds that this was not necessary for projects which would not have gone ahead otherwise, because public sector capital provision was not available. The reasonableness of the bid was tested by comparing it with the nearest public sector example, ie the cost per place of local authority secure accommodation. The estimated cost saving has been calculated by deducting the Net Present Value (NPV) from the average of the PSCs for Rainsbrook and Hassockfield Secure Training Centres (STCs) (both 40 place STCs, similar to Medway).
6 No PSC constructed. The directorate decided that it would be unrealistic to construct a conventional PSC. Detailed plans for a conventional solution were not available and the bids received proposed packages of risks, costs and benefits which were different from each other and from the ideas for a conventional solution which had emerged from a 1994 review by SEMA.