Under new Treasury guidance, PFI schemes will still be accounted for on departmental accounts. However a different accounting standard for PFI schemes will apply for the Treasury's budgeting purposes.This will be based on the European accounting standard, applied by the Office for National Statistics to the national accounts. It means many PFI projects will continue to count as off-balance sheet.
Nick Prior, head of government and infrastructure at consultants Deloitte, said: "This clarification is extremely welcome for the future of PFI and PPPs. Government departments should now be able to bring forward projects that have been delayed because of uncertainty over budgetary arrangements."ADVERTISEMENT
Under new international accounting rules most PFI schemes were due to be brought onto the Government's balance sheet by April this year. However the move has posed accounting problems for some departments, particularly the Department of Health, resulting in a slew of PFI schemes being held up.