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The Private Finance Initiative: Has the Accounting Standards Board Reduced the Scheme's Value for Money?

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  • Robert Kirk
  • Anthony Wall

Abstract

This article examines the state of PFI in the UK following an amendment published by the ASB to FRS 5. It was predicted that this amendment would mean that most properties constructed by the private sector, on behalf of the public sector, would have suddenly to appear on the balance sheets of the latter. This would have led to an unacceptable level of public sector borrowing and could have undermined the entire rationale for the scheme. Having outlined the objectives of PFI and explained the attitude adopted by the ASB, the article examines the reaction of HM Treasury. The article then demonstrates the likely consequences of the main parties in PFI contracts passing on as much risk as possible to the private sector so as to ensure that the assets remain off balance sheet. It concludes by assessing the expected impact that these actions will have on value for money.

Suggested Citation

  • Robert Kirk & Anthony Wall, 2002. "The Private Finance Initiative: Has the Accounting Standards Board Reduced the Scheme's Value for Money?," Public Management Review, Taylor & Francis Journals, vol. 4(4), pages 529-547, January.
    • Handle: RePEc:taf:pubmgr:v:4:y:2002:i:4:p:529-547
    DOI: 10.1080/14616670210163051
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    Cited by:

    1. Grout, Paul A., 2005. "Value-for-money measurement in public-private partnerships," EIB Papers 7/2005, European Investment Bank, Economics Department.
    2. Prem Sikka & Colin Haslam & Orthodoxia Kyriacou & Dila Agrizzi, 2007. "Professionalizing Claims and the State of UK Professional Accounting Education: Some Evidence," Accounting Education, Taylor & Francis Journals, vol. 16(1), pages 3-21.

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