Information’s role in the great PFI handback challenge
By Anthony Walker FRICS MIFireE
Press Release version of article published in Institute of Workplace Facilities Management– January 2025
As hundreds of the UK’s Private Finance Initiative (PFI) contracts approach their expiry dates, facilities management (FM) professionals will have the challenging task of managing the handback of assets to the public sector. This article explores the importance of early preparation and the critical role of FM teams in ensuring a smooth transition.
With the Infrastructure and Projects Authority (IPA) recommending that expiry planning should commence at least seven years before the contract end date, many projects are now entering this critical phase.
The scale of the task is significant. There are more than 550 contracts in England and over 700 in the UK, representing an initial capital expenditure of £46 billion and £57 billion respectively 1, PFI contracts have shaped the nation’s schools, hospitals, prisons, and other critical infrastructure. As these contracts expire, FM teams play a crucial role in ensuring a smooth transition and protecting value for money for the public sector.
Key Facilities Management Responsibilities
Asset Condition and Maintenance
One of the primary concerns for public sector bodies is the condition of assets at handback. FM teams must ensure that PFI assets are maintained in line with contractual obligations throughout the contract term to avoid costly refurbishments or replacements post-expiry.
The IPA guidance emphasises the importance of conducting thorough asset condition surveys well in advance of expiry. FM professionals should implement a proactive maintenance strategy to address any identified issues, maintain detailed records of all maintenance activities and asset performance, conduct regular compliance audits to ensure proper servicing of plant and equipment, and develop a clear understanding of the contractual handback requirements and standards.
Information Management and Transfer
FM teams play a critical role in managing and transferring essential operational information to the public sector. This includes asset registers and condition reports, maintenance records and schedules, operating manuals and procedures, compliance documentation, and performance data and service level agreements.
Early engagement with the public sector authority is crucial to determine their information requirements and establish a robust process for data transfer.
Service Continuity Planning
Ensuring continuity of services post-expiry is a key objective. FM professionals should work closely with the public sector to understand their future service requirements, develop detailed transition plans for each service area, identify any potential gaps in service provision and develop mitigation strategies, and consider TUPE implications for staff transfers, engaging with HR teams early in the process.
Systems and Technology Transfer
Many PFI projects involve bespoke FM systems and technologies. FM teams should audit all systems and software used in managing the assets and services, assess the compatibility of these systems with the public sector’s existing infrastructure, develop plans for data migration and system handover, and provide training and support to public sector staff on key systems.
Commercial and Financial Considerations
FM professionals must work closely with commercial and financial teams to review the cost structure of current services and identify potential efficiencies, assist in developing budgets for future service provision, support the assessment of any outstanding lifecycle works or maintenance obligations, and contribute to negotiations around final settlements and handback arrangements.
Challenges and Mitigation Strategies
Resource Constraints
Many public sector bodies face resource shortages in managing PFI expiry. FM teams can support by providing clear documentation and knowledge transfer to ease the transition, offering targeted training to public sector staff on key asset management and FM processes, and considering secondment arrangements to provide continuity of expertise post-expiry.
Contractual Ambiguities
PFI contracts, particularly older ones, may lack clarity around expiry and handback processes. FM professionals should work with legal teams to review and interpret contractual obligations, seek early agreement with the public sector on practical interpretations of ambiguous clauses, and document all agreed approaches to managing handback requirements.
Relationship Management
Maintaining positive relationships between all parties is crucial for a successful handback. FM teams should foster open communication channels with the public sector authority, engage proactively with subcontractors and supply chain partners to manage their exit, and participate in regular stakeholder meetings to address issues and track progress.
Future Service Provision
The expiry of a PFI contract presents an opportunity to reassess service needs and delivery models. FM professionals can contribute by sharing insights on current service performance and areas for improvement, advising on technological advancements and industry best practices, and supporting the development of new service specifications and performance metrics.
Opportunities for Improvement
While PFI handback presents challenges, it also offers opportunities for FM teams to drive improvements:
- Modernisation: Identify opportunities to upgrade assets and systems to meet current standards and technologies.
- Sustainability: Incorporate energy efficiency measures and sustainable practices into future asset management plans.
- Data-driven decision-making: Leverage accumulated performance data to inform future investment and maintenance strategies.
- Innovation: Explore new service delivery models and technologies that can enhance efficiency and user experience.
Best Practices for Success
To navigate the complexities of PFI handback successfully, FM professionals should:
- Start early: Begin planning and preparation at least seven years before expiry.
- Adopt a project management approach: Treat handback as a distinct project with clear governance, resources, and timelines.
- Collaborate closely: Work in partnership with the public sector authority, fostering transparency and trust.
- Focus on knowledge transfer: Prioritise the capture and transfer of operational knowledge and expertise.
- Stay flexible: Be prepared to adapt plans as circumstances change and new challenges emerge.
Conclusion
The handback of PFI assets and services represents a significant challenge for facilities management professionals. However, by adopting a proactive, collaborative approach and focusing on key areas such as asset condition, information management, and service continuity, FM teams can play a crucial role in ensuring a smooth transition.
As we enter a period of unprecedented PFI expiries, the expertise of FM professionals will be invaluable in protecting public value and setting the foundation for effective long-term asset management and service delivery. By embracing this challenge, the FM industry has an opportunity to demonstrate its strategic importance and contribute to the ongoing improvement of public infrastructure and services.
By Anthony Walker FRICS MIFireE, Director at Sircle
