Five years on, were we right about PFI expiry?
In November 2020, we published the first paper in our CURSHAW Perspectives series - PFI Expiry: The Approaching Challenge and Opportunity. We wrote it as a call to action. We wanted to name the scale of what was coming, challenge the complacency we were already seeing across the PFI ecosystem, and set out, clearly and honestly, what we believed was at stake. Five years on, with the bulk of expiries now actively upon us, we think it is worth asking: how did the analysis hold up? What has changed? And most importantly, what still needs to happen? The short answer on the first question: we got the diagnosis right. The harder truth on the last: the treatment is still far from where it needs to be.
What We Said in 2020
Our core arguments were straightforward, if uncomfortable at the time: A wave of PFI contract expiries was approaching, with the bulk beginning from 2025 and accelerating through the 2030s, peaking at 59 expiries in a single year - 2036.Government was not taking a strategic or consistent approach to managing those expiries, and the NAO’s June 2020 findings confirmed it.The skills, resource and capability required to manage expiry are fundamentally different from those needed to manage a live PFI contract - and most contracting authorities were not carrying them.Early preparation was not a nice-to-have. Based on our experience of the DWP PRIME expiry - the first large-scale PFI to expire - seven years was the minimum, not a comfortable target.Collaboration between contracting authorities and PFI providers was not a soft aspiration. It was the only route to an outcome that worked for both sides and for the taxpayer.Asset condition data was in a worse state than anyone wanted to admit, and that would cost people dearly.We also called, specifically, for a centre of excellence model at the departmental level - a structured, resourced, intelligence-led function that could standardise approach, capture learning from early expiries and make that learning available to the hundreds of contract owners who would follow.
What Has Happened Since
Some of what we warned has been acted upon. Some of it has not. And some of what we anticipated has materialised in ways that are more urgent, and more damaging, than even we expected.
On the positive side
Government has begun to move. The Infrastructure and Projects Authority established a PFI Centre of Excellence and a PFI Contract Management Capability Programme. Practical expiry guidance was published in 2022. An Expiry Health Check framework followed in 2023. These are genuinely welcome developments — and broadly in line with what we recommended.The creation of NISTA in April 2025, bringing together the Infrastructure Projects Authority and the National Infrastructure Commission under one roof, represents a further consolidation of central government’s role. The PFI Centre of Excellence now sits within NISTA. The architecture is there, at least in outline.Our own E3 framework - efficient, effective and equitable - has also found its way into the IPA’s language. Two of the three E’s appear explicitly in their guidance objectives. We will leave it to others to note which one was quietly dropped, and to draw their own conclusions about what that signals.The wisdom of starting to 5 to 7 years out from handback - this is something we talked to the Cabinet Office and Government Commercial Function about in 2019 having managed the PRIME exit. Thankfully it is now a truth universally accepted that starting this far out is fundamental to success. Encouragingly the Asset Condition Playbook published by NISTA is now an acknowledged part of a PFI Project’s Lifecycle and it serves as a highly practical approach that is balanced and proportionate and should, if followed and not abused by third party advisors, maximise the likelihood that assets are handed back in fit condition.
On the less positive side
The adversarial dynamic that we flagged in 2020 - the 33% of contracting authority respondents already expecting to use formal dispute resolution — has not improved. If anything, it has hardened. The AIIP’s Report The PFI Model and the Social Infrastructure Challenge, published in 2024, uncovered systematic evidence of combative and antagonistic practice, with relationships characterised in some cases by a win/lose mentality that leads to value leakage from assets that might otherwise benefit public service users. That is a failure of the system, not just of individual contracts.The government’s own White-Fraiser Report, published in July 2023, reinforced this picture — and while it encourages a collaborative approach, the adversarial behaviours it documented have proven persistent.The asset condition problem has also proven real. Where contracting authorities lack robust, current, independently validated asset condition data, they are finding themselves in exactly the exposed position we predicted — negotiating on the back foot, without the evidence base to hold providers to account. This may all change if there is a growing appetite for Resets or there is a profound change to performance reporting and the base data fundamental to assurance is made available to the public sector.The capacity challenge is also becoming evident. The NAO’s own survey found that 30% of contracting authority respondents did not expect to have enough staff to deliver the expiry process, and 25% felt their teams lacked the necessary skills, that was before the expiry volume really began to build. Our own experience working across active expiry programmes suggests those concerns were well-founded. Where authorities have underestimated the additional resource required, and have relied on existing contract management teams to absorb the expiry workload on top of business as usual, the strain has shown - both in the quality of expiry preparation and in the day-to-day management of the live contract. That said, we would not claim this is universal: some authorities have planned well and resourced accordingly. The picture is mixed, but the risk of underestimating the capacity requirement remains real and, in our view, underappreciated.
What the landscape looks like now
We are no longer in the “approaching challenge” phase. We are in it. As of March 2024, there were 665 PFI contracts with an estimated £136 billion in unitary charge payments remaining. Nearly 200 contracts will expire between 2023 and 2030. The early years of this wave - the relatively lower-value, mixed-sector expiries we described as an opportunity to build the learning curve - are already underway. The question is whether that learning is actually being captured and applied, or whether each contracting authority is reinventing the wheel in isolation.The answer, in our experience of working across this market, is: inconsistently. Some authorities are well-prepared, resourced, and engaging their counterparties constructively. Others are not. The gap between the prepared and the unprepared has not closed as quickly as the guidance and frameworks from the centre might suggest. Guidance is not the same as capability and guidance will not plug a widely publicised capacity gap that has been created by swingeing government cuts since 2010. The question for policy makers in this context should be how can the very constructive and highly valuable guidance be used to full effect. There are limits to the support that can be provided by NISTA’s pool of specialist associated given the volume and scale of expiring contracts. Perhaps now is the time for scalable technology solutions informed by PFI practitioners and built upon published guidance.The supply chain is also under pressure. With expiries accelerating, the specialist advisory market is stretched. Contracting authorities that delay will find themselves competing for the same small pool of genuinely experienced practitioners — at a cost, and at a time, that is not of their choosing. This is especially the case with the surveying market in the 2030s - an issue we have advised portfolio investors on.The Public Accounts Committee’s 2021 inquiry into managing the expiry of PFI contracts validated many of our concerns, and parliamentary scrutiny has continued to intensify. The most recent parliamentary inquiry into the government’s use of private finance for infrastructure has gone further still - examining not just readiness but the broader lessons of PFI as a model, and the institutional reforms needed to manage this portfolio through to its conclusion. On behalf of the AIIP we have done significant work on the lessons that need to be learned for the next wave of PPPs to be highly functioning to ensure that the public realm can be rebuilt using PPP to address decades of lost investment.
What still needs to happen
We said in 2020 that no time was too early to begin preparing. That remains true - but it now needs to be said differently. Previously we have extolled the virtues of preceding handback with a contract review or reset - the value of doing this has not gone away. Early reviews and resets may avoid legacy disputes from troubling expiry preparation and should be used as the solid foundation on which to build handback plans in partnership.For some contracts, the time for early preparation has passed. The question is whether you can recover the ground, and how quickly.For those still in the early-to-mid preparatory window - seven or more years from expiry - the message is unchanged: start now, start properly, and treat expiry not as a one-off project bolted onto the end of contract management but as a distinct programme that requires dedicated governance, dedicated resource, and a clear strategy.For those closer to expiry, there are three things that matter above all else:
Know your commercial position.
Understand what the contract actually says about handback obligations, and understand the gap between those obligations and the current reality of the asset and the service. That gap - its size, its nature, and who bears the risk of closing it - is the foundation of everything that follows. If the provisions are lacking or highly impracticable as many of them are based on the protection mechanisms in relation to asset condition designed by lawyers, now is the time to deal with these.
Do not conflate expiry management with contract management.
The skills are different. The tasks are different. The pressures are different. If you expect your existing team to absorb this on top of their day jobs, you will compromise both. Ringfence your BAU resource and supplement it - something the IPA’s own guidance has now explicitly acknowledged.
Invest in the relationship.
We know this is the hardest thing to hear if the relationship is already strained. But the evidence - from our own experience and from the wider market - is unambiguous. Adversarial expiry processes cost more, take longer, produce worse outcomes for assets and services, and leave both sides worse off. The equitable handback is not the soft option. It is the smart one. We have produced joint handback plans and in the process have enabled parties to sensibly overcome material issues that were being ignored and stood, if unresolved, to destroy trust and partnership working.At the centre of government, the challenge now is to move from the provision of guidance and frameworks to genuine active oversight - with teeth. NISTA’s expiry health check framework is a useful diagnostic tool. The question of what happens when that diagnostic identifies a contract that is materially unprepared, with expiry approaching, is not yet clearly answered. The eight new guidance documents NISTA published on PFI contract management in 2024 are a step in the right direction. But guidance without accountability is a ceiling, not a floor. The challenge for policy makers is how will they ensure that this guidance is read and acted upon especially where it is the case that teams are under resourced. The sad irony may be that those who need it most or would gain the most value from reading and applying it are those who are least likely to read it precisely because they are already stretched.
A final word
When we wrote Paper #1 in 2020, we were making a prediction. The wave was still offshore. We could see it on the horizon and we wanted to make sure that everyone who needed to act had enough time to do so.The wave has now reached the shore. The contracts are expiring. The assets are being reviewed, negotiated and handed back - some smoothly, some not. The decisions that were deferred in 2020, or in 2021, or in 2022, are now being made in a much less forgiving environment.We take no satisfaction in having been proved right about the challenges. What matters now is what happens next - whether the remaining contracts are managed with the rigour, the resources and the collaborative intent that this once-in-a-generation programme demands.We remain committed, as we have been since 2019, to sharing what we know, to supporting the dialogue between all parts of the PFI ecosystem, and to delivering the efficient, effective and equitable expiry that every PFI contract - and every taxpayer who has funded it - deserves.
Curshaw is the UK’s leading independent advisory firm specialising in PFI expiry, handback and transition. For more on our work, or to discuss your specific PFI expiry position, contact us via email at hello@curshaw.com.