Michael Mcallister
Michael Mcallister is one of our Associate Directors and heads up our Commercial & Finance team.
It’s coming to an end… Private Finance Initiative (PFI) contracts are due to expire soon.
What's the benefit of a PFI contract?
PFI contracts are a type of agreement between the government and private investors, predominantly associated with capital projects and infrastructure upgrades. Types of buildings included schools, hospitals, roads, and prisons.
One of the advantages of a PFI contract is the ability to manage the costs of large capital projects over (typically) 25-35 year contracts. Whereas the public opinion is that the contracts encouraged privatisation and capitalist interests. The public is also concerned by the increasing total costs and the financial burden to the public sector.
Despite its controversial reputation, PFI contracts were popular with the government in the late 90s and early 2000s. Now, many are due to expire.
In 2018, the government decided to drop the use of PFI contracts. This then marked the beginning of the end for PFI contracts.
The majority of contracts start to expire in 2025. Because each contract is so unique from the next, there isn’t an easy playbook for parties involved in PFI to follow, during exit.
For those working in the construction industry, it’s important to consider what happens next. You’ll need to consider how you can prepare yourself for hand back. What opportunities will be available with this knowledge and your unique skillset?
Do you have your exit strategy sorted?
Our clients, ranging from public sector bodies to SPVs or contractors, are all preparing for this process. As the expiry date approaches, you should consider who’ll lead this within the business. This should help provide clear guidance, a practical list of steps, and a structured approach. Doing so now would allow the company to benefit from an effective handover when the final agreement expires.
1. Understanding how the expiry process works.
2. Assessing what assets and services will be required after the contract ends.
These two phases need help to consider how the contract outlines and whether assets are due to return. In turn, this affects the decisions around the future and current service arrangements after expiry. By having the right team behind you, you’ll have more confidence about the whole process.
How can we support you?
It’s important that you have a plan in place to ensure that your organisation can handle the hand back of assets. The hand back process requires unique skills and knowledge about the condition of the asset. If you don’t already have someone in the company looking into this, you’ll need to recruit someone ahead of time, before contracts expire.
Because the contracts have been in effect for some time, many authorities may be unaware of the state of the assets. This then puts them at danger of being returned to the public sector in different conditions.
This opens up opportunities for various workers in the facilities management industry. Professionals such as commercial professionals and transformation specialists will assist in the preparation.
When it comes to preparing a team for success once the PFI contract expires, we know you’ll have a lot to think about. We’ve already started building teams with our respected partners, so our help can relieve of that some pressure.
Some of the roles we have filled in the last months few months include:
- Senior Commercial Managers
- Project Managers
- Contract Specialists
- Account Directors
Our Associate Director Michael McAllister is working alongside organisations offering his expert advice. Whether that’s salary benchmarking, sourcing candidates, or explaining how the market is responding.
What next?
It can be difficult to find the right employees with the right skill set to contribute to the handover. With Boden Group’s support, we’ll help you to build a team to suit your requirements to make the PFI contract expiry process as simple as possible.
Need support with PFI contract expiry? Or do you have PFI experience which you’d like to register with Boden to place you with one of our clients?
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