UK hospital PFI audit: findings and contract status

What the audit found

The NAO examined 76 operational hospital PFI contracts in England with a capital value of £6 billion. It focused on contract performance after hospital buildings opened, rather than the original decision to use private finance ¹.

The report found that most contracts were well managed and met the value-for-money expectations set when signed. It found no evidence that bundling cleaning, laundry, portering and similar services into PFI was better or worse value than separate management ¹.

Long-term risks remained. Nine contracts had less than 0.2 full-time-equivalent public staff assigned to contract management. Trusts had limited room to reduce index-linked payments, and the Department of Health lacked central portfolio data for benchmarking and intervention ¹.

The official response

The government's 2011 Treasury Minute agreed with the call for continued central support and partly agreed with recommendations on maintenance tests and portfolio action. It cited a contract-review pilot, a best-practice model and support for NHS trusts ³.

The response said the Department of Health would work with trusts on future central support. Treasury planned to use lessons from a review of Queen's Hospital in Romford across the wider PFI portfolio ³.

Parliament

The Public Accounts Committee took evidence from officials and published PFI in Housing and Hospitals in January 2011. For hospitals, it repeated that most operational contracts met the original expectations, but pressed for data, maintenance tests, stronger bargaining and central support ².

The committee treated local trusts as the day-to-day contract managers and central departments as portfolio stewards. Its recommendations sought clearer oversight of costs, performance and savings across the group of contracts ².

Follow-up audits and recommendations

In 2020 the NAO examined PFI contract expiry across English public bodies. More than 700 UK PFI contracts were then operational, and the audit focused on skills, contract records, asset condition and service continuity as contracts end ⁴.

A 2021 Public Accounts Committee report said government had launched an expiry-support programme with contract health checks, training and expert support. It still found gaps in contract records and central data ⁵.

Courts, tribunals and investigations

No court judgment deciding the 2010 portfolio audit findings was identified in the official sources reviewed. Individual PFI contracts can produce disputes or litigation, but those records do not amount to a judicial ruling on this NAO report ^1,4.

The sources record audit and parliamentary scrutiny. They do not establish criminal conduct by a trust, contractor or investor ^1,2.

Where it stands now

The government announced in 2018 that it would stop using PFI for new projects. Existing contracts remained in force, with many approaching expiry and asset handback ^4,5.

Later official work shifted from the 2010 question of day-to-day hospital contract performance to expiry readiness across sectors. No single official tracker closing every hospital recommendation was identified, so this case remains follow-up pending ^3,5.

Timeline