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17.06.14

Defra gave good support to ‘unclear’ PFI deals – NAO

The National Audit Office (NAO) has criticised three local authority PFI (Private Finance Initiative) waste contracts with regards to a “lack of clarity” relating to the roles and responsibilities of the parties involved. 

The government auditors examined the contract by Defra in PFI contracts entered into and managed by Surrey County Council, Norfolk County Council and, jointly, by Herefordshire and Worcestershire County Council. 

While the overview noted that Defra gave “good support and guidance” to the local authorities, the nature of its funding arrangements made it difficult for it to withdraw or amend its financial support to these contracts, even when significant infrastructure had not been delivered as planned. 

All three of the PFI waste contracts sit under Defra’s Waste Infrastructure Delivery Programme, which oversees the allocation of £1.7bn in waste infrastructure credits to 28 local authorities in England, effectively funding councils directly for a portion of the costs it has to pay its contractor. 

NAO stated: “All three projects experienced significant delays due to differing problems such as difficulties obtaining planning permission, complex commercial considerations, opposition for local groups and uncertainty over technology.” 

The NAO report, however, makes no judgements about the value for money provided by the three contracts as this is a matter for the local authorities’ auditors. Nor does it examine the value for money provided by Defra’s Waste Infrastructure Delivery Programme. Its findings will now form the basis of a Public Accounts Committee hearing. 

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