The Private Finance Initiative (PFI) was launched by the United Kingdom (UK) Government in 1992 in order to encourage the private sector in the UK to become more involved in public sector development projects. Moreover, a key theme of the initiative was that the public should receive ‘value for money’ with respect to such projects. This paper investigates the accounting issue as to whether or not the private or the public sector should record any related property in PFI projects on balance sheet. It argues that although both HM Treasury and the Accounting Standards Board (ASB) might agree on the accounting principles, the practical impact is that in order for related properties to stay off the public sector’s balance sheet, more risk needs to be transferred to the private sector. As a consequence of this, the objective of providing value for money to the public may not be achieved.
|Journal||Public Money and Management|
|Publication status||Published - 2001|