§ Mr. BeithTo ask the Secretary of State for the Home Department if he will list those Private Finance Initiative contracts entered into by his Department which transfer(a) volume risk, (b) risk of a return lower than one tied to movements in the retail prices index and (c) risk associated with ownership of the capital asset after the contract period; and if he will make a statement. [15593]
§ Mr. StrawThe following Private Finance Initiative contracts entered into by my Department transfer:
(a) volume risk:
- Police National (telecommunications) Network
- Prison PABX system
- Immigration Caseworking project
- United Kingdom Passport Agency passport processing contracts
- Secure Training Centre, Cookham Wood
- Coldingley Prison Industries Workshop
(b) risk of a return lower than one tied to movements in the retail price index:
- Her Majesty's Prison Altcourse
- Her Majesty's Prison Parc
- Her Majesty's Prison Lowcham Grange
- Secure Training Centre, Cookham Wood
- Police National (telecommunications) Network
- Immigration Caseworking project
- United Kingdom Passport Agency passport processing contracts
- Prison PABX system
- Gatwick Immigration Detention facilities
- Coldingley Prison Industries Workshop
(c) risk associated with ownership of the capital asset after the contract period:
- Police National (telecommunications) Network
- Immigration Caseworking project
- United Kingdom Passport Agency passport processing contracts
- Prison PABX system
- Gatwick Immigration Detention facilities
- Coldingley Prison Industries Workshop
All Home Office contracts are signed with value for money in mind.
Transfer of volume risk is impractical for contracts for prison facilities, as the client has control over the level of business. In such cases, risk is transferred by payment in relation to the contractor's liability to ensure that contractually specified facilities are made available to the demanding contractual timetable and that the availability of the service is maintained at a high level thereafter.
650WPayments to contractors may fall below movements in retail price levels if service quality is below specified standards.
§ Mr. BeithTo ask the Secretary of State for the Home Department what capital assets his Department will acquire under signed Private Finance Initiative contracts; what is the value of those assets; if, in each case, his auditors have provided an opinion that the asset will be recognised by the private sector contractor for accounting purposes; and if he will make a statement. [15601]
§ Mr. StrawMy Department will obtain services, not assets, under the duration of signed Private Finance Initiative (PFI) contracts. Design, Construct, Manage and Finance prisons (Altcourse, Parc and Lowdham Grange) and the Secure Training Centre for young offenders (Cookham Wood) will automatically become the Department's assets at no capital cost at the end of the PFI contracts in 25 and 15 years respectively. The Home Office has an option to acquire assets of the Immigration Caseworking project, and of the United Kingdom Passport Agency's passport processing contracts, at the end of the initial contract, on terms specified in the contracts. Any decision by the Home Office on whether to take up the options will depend on circumstances at the time.
It is not for the Department's auditors, the National Audit Office, to provide an opinion on whether assets will be recognised by the private sector for accounting purposes.