A7C Local Government · PFI Handback

Stakeholder landscape · working document

Who holds this problem, and what each of them actually adds

Around 700 PFI contracts reach an ending nobody designed, peaking in the mid-2030s. This maps every party in that landscape by role, responsibility and influence — and asks of each one the only question that matters for the strategy: what do they contribute that no one else does?

Base Stakeholder Diagnostic v0.1, 17 Jun 2026 Incorporates Working group, 13 Aug 2026 Actors Relationships
Three of the group's open actions are answered, two of them negatively. PFI-01 — the Shareholder Executive. It no longer exists. Merged with UK Financial Investments on 1 April 2016 into UK Government Investments, wholly owned by HM Treasury. Published portfolio: Channel 4, British Business Bank, UKAR, NESO. No evidence of PFI or PPP equity. The "taxpayer money at risk, therefore real teeth" hypothesis does not appear to survive the public record. Confirm against UKGI's annual report, but do not build the pitch on it. PFI-03 — the NAO report on Local Partnerships. Probably a conflation. NAO has repeatedly reviewed Local Enterprise Partnerships (2016, 2019) — a different organisation. The 2020 NAO report here is Managing PFI assets and services as contracts end, already held. PFI-07 — closed. Local Partnerships ownership confirmed from source: LGA, HM Treasury and Welsh Government. LLP OC346845, incorporated 2009.

Every actor by role, responsibility and influence, with a verdict on what it contributes. The verdict column is the point: a landscape crowded with bodies is not the same as a landscape with an owner. Read the verdict column alone and the group's central diagnosis becomes visible — only three actors are decisive, and none of them currently treats this as their problem.

ActorRoleResponsibilityInfluenceWhat it adds to this landscape
What the verdict column shows. Three actors are decisive: the Chief Secretary to the Treasury, who alone holds both the guidance and the money; the LGA, which alone can convert 300 separate problems into one negotiating position; and the mayoral tier, which alone offers a named individual with personal electoral exposure. Everything else is either method without force, force without interest, or interest without capacity. Local Partnerships is the sharpest case — it adds genuine method and genuine access, and no authority whatsoever. That is not a criticism of the organisation; it is what a jointly-owned advisory LLP is designed to be.

The contract lifecycle as a value stream. Top lanes are who is acting; red is where public value drains out; green is the intervention that would have stopped it. Read the red lane left to right — every leak downstream is cheaper to prevent upstream, and the system only ever engages at stage 5.

Public sideMarket sideSelect any actor for detail
The shape of the problem in one line. The market side is present and active from stage 1 to stage 6. The public side is contractually present throughout but operationally absent from stage 2 to stage 4 — exactly the years in which condition, records and the lifecycle fund are determined. By the time the receiver engages, the evidence needed to argue has already been lost.

The public side by altitude, with accountability lines between levels. Select a node to trace its chain upward.

Decision-holderPublic bodyAdded 13 AugMarket
the group's diagnosis, shown structurally. Trace upward from the receiving council and the chain thins rather than thickens. The council passes to MHCLG, MHCLG passes to Treasury, and at Treasury it becomes one line among hundreds. The group's phrase — "it disappears" — is visible here as the absence of any node whose primary job this is.

The relationships that carry actual control, grouped by type. Ownership behaves very differently from advice, and the cases where an actor has more than one parent are where the strategy either breaks or unlocks.

The dual-parent cases decide the strategy. The academy trust answers to DfE for funding while the council carries the PFI liability — misalignment that weakens every receiver-side incentive. Local Partnerships answers to the LGA, HM Treasury and the Welsh Government at once. James reads that as accountable to no one in practice. The opposite reading is that it is the only body already sitting on both sides of the LGA-then-Treasury sequencing question. Both are consistent with the ownership structure. The difference is whether you treat LP as a route or an obstacle.

the group's three end-of-contract scenarios, extended into who is exposed under each — action PFI-08. Scenario 3 was judged most likely absent intervention, and it is the one in which the public side does worst.

Scenario 1 · clean expiry
Asset transfers, liabilities land

The contract simply expires. Assets transfer for nominal sum; maintenance and service liabilities fall wholly on the public sector. Few players — the authority and the Treasury.

Exposed: the receiving authority, in full and immediately. The s151 officer carries an unprovided liability. TUPE staff transfer with up to thirty years' accrued service.

Who gains: the SPV and its equity, exiting cleanly at the lowest contractual standard.

Scenario 2 · the flip
Sponsors restructure before exit

A flip involving SPV owners or sponsors, potentially including retained government interests or golden shares.

Exposed: depends entirely on where any retained public interest sits — which is what the UKGI check was meant to establish. On current evidence no such interest has been found, which makes this scenario thinner than hoped.

Who gains: whoever structures the flip. The authority is a spectator unless a golden share exists.

Scenario 3 · rollover — most likely
The incumbent extends on its own terms

The incumbent SPV rolls into a further long concession. Judged the most likely outcome absent intervention.

Exposed: the authority negotiates renewal from the weakest possible position: no condition baseline, no asset register, no in-house FM capability, and a live service it cannot switch off.

Who gains: the incumbent equity holder, twice — on the tail of the original deal and again on the renewal.

The strategic consequence. If scenario 3 is the base case, the intervention that matters is not handback mechanics at all. It is making the authority creditworthy as a negotiating counterparty before the renewal conversation starts. That is a different product from expiry support, it is needed earlier, and it is not what Local Partnerships currently sells. It is also what converts the proposition from a repair bill into a thirty-year mission: the renewal decisions arriving between now and 2037 will set the next generation of public infrastructure contracts, whether or not anyone treats them as a policy question.

Computed from the 720-asset catalogue by mapping each English procuring authority to its mayoral combined authority. The critical split is in remit versus geography only: local authority, fire and police schemes sit within functions a mayor holds or can reach, while NHS trust schemes sit inside the same boundary but answer to DHSC, not the mayor. Only the first column is exposure a mayor could act on.

Mayoral areaIn remit£m in remitGeography only£m geography£m totalIn remit, expiring by 2032
Greater London GLA · 2000662,953109813,93434
West Yorkshire WYCA · 2014241,76344272,1908
South Yorkshire SYMCA · 2014181,4142411,4555
Greater Manchester GMCA · 2011311,32467422,06712
East Midlands EMCCA · 2024201,17654221,59810
Liverpool City Region LCRCA · 2014111,125001,1254
North East NECA · 2024251,06485521,61511
West Midlands WMCA · 2016201,00881,4202,4298
West of England WECA · 2017636325028653
Tees Valley TVCA · 20166151001515
Cambs & Peterborough CPCA · 2017313735186550
York & North Yorkshire YNYCA · 202457813123894
Total23512,556495,91718,473104
The landscape shift
The ex-mayor of GM is now Prime Minister

Andy Burnham became PM on 20 July 2026. the group's "figure with genuine exposure at the top of the pyramid" is therefore literal: the PM personally carried Greater Manchester's 31 in-remit PFI projects (£1.3bn) for nine years.

Within the mayoral tier itself, GM ranks fourth by in-remit capital — London (£2.95bn), West Yorkshire and South Yorkshire are larger. The current GM mayor inherits the portfolio; the argument that reaches No.10 fastest is the one framed in the former mayor's own experience of it.

The limit of the mayoral route
It reaches 59% of England

195 English projects sit in areas with no mayor at all — Kent, Lancashire, Essex, Staffordshire, Cornwall, Northamptonshire and others. A mayoral strategy addresses a majority of the exposure and leaves roughly two-fifths of it structurally unowned.

That is an argument for using mayors as the salience engine rather than the delivery route: they can make it a national argument, but they cannot be the national answer.

Where the gap is widest
West Midlands

WMCA carries £1.42bn of geography-only exposure against £1.01bn in remit — the only area where what the mayor cannot touch exceeds what he can. Almost all of it is large acute hospital PFI.

This is the clearest single illustration of the accountability split: a mayor can be asked about a hospital in his city region and has no locus whatever to act on it.

The near-term test
104 in-remit contracts expire by 2032

Of those, 34 are in London and 12 in Greater Manchester. These are live within one mayoral term, which makes them a legitimate manifesto and scrutiny item now rather than a next-decade abstraction.

London's concentration is the strongest available argument for approaching the GLA — and it has been absent from the strategy entirely.

Method and caveats — read before quoting any figure here. Computed from pfi_catalogue.db (720 assets) over English projects only. Authority names were normalised and matched to combined-authority membership by string rule; the constituent-council mapping is our own and has not been checked against each authority's constitutional order, and the 2024 bodies (North East, East Midlands, York & North Yorkshire) carry the most risk of membership error. Central and national bodies (MoD, National Highways, GCHQ, HMRC, DfE, prisons) are excluded from geographic attribution. Capital values are as recorded in the catalogue and are not inflation-adjusted, so they are not comparable across contract vintages. The source data contains authority name variants (Leeds and Leeds City Council appear separately) which the normalisation is designed to catch but may not catch completely. Treat this as a directional first cut for targeting, not as a published exposure statement.

Current state · the delivery model

Anatomy of a typical PFI project

There is no single standard PFI, but there is a standard shape. This is the machine as designed — who puts money in, who builds, who operates, who maintains, and where each party's incentive points once construction is finished.

The structure

who contracts with whom

The SPV is the hub: a thinly-capitalised company whose only assets are the concession and the subcontracts. Everything the public sector wants is delivered through it; everything the private sector earns is extracted through it. Note how many boxes are affiliates of the same sponsors — the construction contractor and the FM provider are frequently related parties to the equity holders, which is the structural reason self-reported condition data is not independent evidence.

Procuring authority Council or NHS trust Pays the unitary charge SPV / ProjectCo Thinly capitalised — owns only the concession and the subcontracts Equity investors Originally builder + FM + financial Now largely infrastructure funds Senior lenders Bank or bond debt — bulk of capital Repaid before expiry D&B contractor Design and construction Often an equity affiliate Hard FM / lifecycle Maintenance, plant replacement Holds the maintenance record Soft FM Cleaning, catering, security TUPE population sits here Independent tester Certifier, insurers, advisers Present at build, gone by tail Users — pupils, patients, residents, road users Experience the asset. No contractual voice at any point. Operator Academy trust, ALMO, county Runs it, does not hold the contract Project agreement Unitary charge → Equity ↓ distributions ↑ Debt ↓ service ↑ Subcontracts School agreement Service delivered
Three structural facts that decide the endgame. The SPV has no assets to pursue once it distributes and dissolves — the Stoke liquidation left roughly £7.2m of repairs uncompleted. The senior lender, the one party with both the expertise and the motive to police the contractor, is repaid and gone years before expiry. And the operator on the ground is frequently not the contracting party — so the person who sees the building degrade is not the person who can act on it.

The lifecycle, and where the money moves

current-state value stream

The same project across time. The gold lane shows where cash actually flows; red is where public value is lost. The pattern to notice: the public sector's leverage is highest at the two ends and near zero in the middle, which is the reverse of when it pays attention.

What the model got right

action PFI-11

The position paper was criticised for being insufficiently positive about what PFI genuinely delivered. That correction is right on the merits and useful tactically: a proposition that opens by trashing the model cannot credibly propose the next one.

Delivered
Assets that would not otherwise exist

A very large programme of schools, hospitals, roads and housing was built when direct capital was constrained. Whatever the cost of finance, the buildings are real and in use.

Delivered
On time and on budget, mostly

Construction risk genuinely transferred. The discipline of a lender with capital at risk produced completion performance the public sector had struggled to achieve directly.

Delivered
A maintained estate, for 25 years

The unitary charge bundled maintenance and could not be raided. Against the non-PFI estate, where maintenance is the first cut every year, PFI assets were protected from backlog for a generation.

The real failure
Nobody designed the ending

The honest critique is narrower and more damning than "PFI was a rip-off". The model worked as designed for twenty-five years and had no design for year twenty-six. Handback was a clause, not a plan. That is a fixable design fault, which is exactly what makes a next-generation model arguable.

Future state · the models

What replaces it

Two questions, not one. What happens to the assets now reverting — and what model the next generation of public infrastructure should use. The first is forced on us by 2037. The second is the thirty-year mission.

Near term — the options ladder

what an authority chooses between

Every expiring contract resolves into one of these, ordered by the capability the authority needs — which is also the order of how much value it can capture.

Default · worst
Rollover to the incumbent

Scenario 3. The incumbent extends on its own terms because the authority has no baseline, no capability and a live service. Most likely absent intervention.

No capability needed Value captured: none

Common
Re-procure the FM

Asset returns publicly; services go to market. Works if the condition baseline is sound and records survived. Fails quietly if not — the new provider prices the unknown.

Procurement capability Value: moderate

Proven
Insource

Direct delivery; Islington's housing insourcing is the reference. Needs in-house technical leadership most authorities no longer have, and inherits the TUPE population with up to thirty years' accrued service.

High capability Value: high

Best available
Buy out early and modernise

Take control before expiry, then use the moment to re-baseline a decarbonisation and modernisation capital case rather than paying a repair bill. Hexham is the buy-out reference.

Capability + capital Value: highest

The precondition is the same for all four. Every option except the worst requires a condition baseline, recovered records and a reconciled lifecycle fund. An authority that has not done that work is not choosing between four options. It has one, and the incumbent knows it.

Long term — models for the next generation

the thirty-year mission

If the honest critique is that PFI worked for twenty-five years and had no design for year twenty-six, then the test for any successor is what it does at the end, not what it does at financial close.

ModelAsset ownershipCondition riskReturn controlEnd-of-life designRead
PFI / PF2the incumbent SPV, reverting at expirySPV in theory; authority in practice, once the SPV dissolves Uncapped. Refinancing and secondary-sale gains largely retainedNone. Handback is a clause, not a planThe problem
Mutual Investment ModelWales SPV with a public-sector minority equity stakeShared — the public stake buys a seat and sight of the data Partially capped; public co-investor shares upsideAssurance built in: Independent Tester, Clerk of Works, BIM Information ManagerClosest live answer
NPD / hubScotland SPV with capped private returnShared, with a public-interest director in the room Capped by design. Surplus returns to the public sideStanding vehicles may retain transferable client capability between dealsSolves the capability cliff
Regulated Asset BaseTideway, Sizewell C Regulated company, indefiniteRegulator sets and enforces condition Regulated rate of return, periodically resetNo end. The asset is never handed back — the problem is dissolved rather than solvedWorks at scale only
Alliance / integratedNEC4 Alliance Public throughoutShared pain and gain across the alliance Open-book, incentivisedContinuous — no expiry cliff exists to design forNeeds a capable client
Public + escrowed lifecyclethe minimum reform Public throughoutPublic, but funded — lifecycle ring-fenced and audited Not applicableThe fund is the plan. Condition is a reported metric, not a terminal disputeCheapest fix
What the comparison shows. Every model that handles the ending well does one of two things: it keeps a public party inside the vehicle with sight of the data (MIM, NPD/hub), or it removes the ending altogether (RAB, alliance). PFI did neither — it put the public sector outside the vehicle and gave it a cliff edge. That is the single design lesson, and it is specific enough to build a proposition on without requiring anyone to concede that PFI was a mistake.

Sources and evidential status

added 13 Aug after stress test

The first version of this document carried no source list, against A7C's own production standard. This is the repair. Claims are graded by what actually stands behind them, because the mix is uneven and the reader is entitled to know which is which.

Verified 13 Aug · primary or official
Stands as printed

Local Partnerships ownership and structure — localpartnerships.gov.uk/about-us; LLP OC346845. Companies House filing not yet pulled; do that to make the check repeatable.

NISTA — established 1 April 2025 from the IPA and NIC as a unit within HM Treasury, lead minister the Chief Secretary. Parliamentary and gov.uk sources.

Local Audit Office — MHCLG local audit reform strategy (Dec 2024) and transition plan (Nov 2025).

Mayoral exposure table — computed from pfi_catalogue.db. Method and caveats stated in full on that tab.

From the research base · locators exist, not yet inlined
Traceable, needs citing

Schools cohort figures, Stoke handback and liquidation detail, NAO condition-data and dispute findings, expiry-health-check ratings, the seven-year doctrine, SOPC4 condition and survey requirements, the 28-day adjudication point and Lancashire Schools [2024] EWHC 37 (TCC).

All sit in research/01–11 and docs/ in the catalogue with URLs attached. They are not yet carried into this document as inline citations. Do that before any external circulation.

Stated in discussion · unverified
Do not quote externally

Aggregate problem-size and adviser-savings figures circulating in discussion are excluded from this edition pending verification.

Authority-readiness anecdotes; sinking-fund exhaustion; investor concentration estimates; the proportion of councils without asset registers.

Known gaps · named, not filled
What would change the conclusions

The completed-expiry record. Scenario 3 is a group judgement with no cited cases, and the document itself notes custodial is already through a first wave. Tabulating what actually happened — rollover, re-procurement, insource or buyout, and on whose terms — is the single highest-value outstanding task.

Procurement law on rollover. A continuation "on the incumbent's terms" is generally a direct award and is constrained. Untested here, and it may make scenario 3 harder than assumed.

Scottish Futures Trust. Page 3 borrows NPD/hub without asking whether SFT already runs the national expiry programme this document says nobody owns.

The national-interest lens

seven dimensions · from the strategy canvas

Every option — near-term route or successor model — is tested against the same seven dimensions. This is the scoring frame the workbench (page 5) uses, and it is deliberately a national-interest test, not a lowest-cost test: an option can win on price and fail the country.

1 · Fiscal / VfM
Value for public money

Whole-life cost including the liabilities an option hides — TUPE, backlog, renewal pricing — not just the headline fee.

2 · Service continuity
The service keeps running

Schools open, wards safe, lights on through the transition. The dimension incumbents weaponise.

3 · Condition & safety
Asset state at and after transfer

Statutory compliance, backlog trajectory, and whether the condition baseline is independently evidenced.

4 · Capability / sovereignty
Public-side capability rebuilt

Does the option leave the authority stronger or permanently dependent? The capability cliff is the system's deepest wound.

5 · Market & competition
A functioning supply market

Does the route sustain competitive tension, or hand the incumbent a renewal on its own terms?

6 · Future-fit / decarbonisation
Assets ready for the next 25 years

LED, heat pumps, retrofit, changed demand. Original handback standards rarely cover any of it.

7 · Transparency / accountability
Who can see, who answers

Open data, auditable decisions, a named owner. The dimension the whole landscape currently fails.

The segmentation spine sits beneath it. Options are chosen per cohort, not nationally: sector × contract vintage (pre-SoPC / SoPC / PF2) × receiving-entity type × financial resilience. The same option can be right in one cell and reckless in the next — which is the argument against any one-size national prescription, and for a designed national framework.

The mission framing

structured for the pitch
The problem, stated fairly
Not a scandal — a design gap

A generation of infrastructure was delivered by a model that worked as intended and was never designed to end. Around 700 contracts now reach that undesigned ending, peaking in the mid-2030s.

The opportunity
A renewal decision, not a repair bill

Every expiry is a decision on what replaces it. Taken together and taken deliberately, they are the largest single opportunity to reset how Britain builds and maintains public infrastructure for thirty years.

The ask
Someone must own it

No body has the mandate, the authority and the interest simultaneously. The ask is not money first — it is an owner, with the funded trigger following.

The credibility
The people who structured the first deals

The group structured the original PFI deals, is watching them expire, and is working on what comes next. That critique cuts both ways — that history is the asset, provided the proposition is reform rather than repetition.

Two things to settle before this goes anywhere. The aggregate problem-size and adviser-savings figures circulating in discussion are unverified and excluded from this edition. If a headline figure is wrong in front of the decision-maker, the argument does not recover. Separately, adviser conflicts are structural in this market: advice from parties connected to incumbent funds may be sound on the merits and still not disinterested — weigh it before it is in the room, not after.

Data explorer · the full catalogue

Pull the data apart

All 720 catalogued projects, filterable live. Slice by expiry window, geography, sector or commissioning body — every tile, chart and row below recomputes from the current filter. Click a bar in the expiry chart to jump to that year.

Projects
Capital value £m
Unitary charge 2023–24 £m
Commissioning bodies
Pre-SoPC contracts
Distress-flagged

Expiry profile

projects reaching handback, by year — click a bar to filter

By sector

capital £m in current filter

By region

capital £m in current filter

Projects

Project ▾Authority SectorRegion Expiry Capital £m UC 23–24 £mFlags
Provenance. Data embedded from pfi_catalogue.db (720 projects, HMT/IPA-derived catalogue with A7C enrichment: pre-SoPC flags, distress flags from Companies House, derived expiry years). Capital values as recorded, not inflation-adjusted — not comparable across contract vintages. 57 projects carry no recorded expiry date and are excluded from the expiry chart but included elsewhere. Unitary charge is the 2023–24 reported figure and is missing for some rows. Regenerate the dataset with scripts/mca_exposure.py siblings against a refreshed database before external use.

Options workbench · live scoring

Score the options, keep the record

Ported from the July strategy canvas and reseeded to the 13 August position. Every option scores 0–3 against the seven national-interest dimensions (page 3). Your edits persist in this browser; export before sharing a position. Statuses: Decided · Shortlist · Explore · Parked · Rejected.

Open actions

refreshed 13 Aug — tick to record done
Provenance. Structure and future-state ladder from the July Strategy & Options Canvas; scores are working judgements, not analysis. Reseeded 13 Aug: statuses updated for the Local Partnerships ownership finding, the three end-of-contract scenarios, and the change of Prime Minister. State is stored only in this browser (localStorage) — export JSON to share or move it.