Thank you so much. Never enjoyed a webinar so much!
Public sector organisations are likely to face operational disruption, lack of service continuity and financial loss if exit arrangements are poorly managed.
Early planning, due diligence and engagement with Project Co will ensure that when ‘the keys are handed over’, the condition of the facility, services transferred and additional assets are as specified in the Project Agreement. This is to prevent, following handback, liabilities arising and immediate investment. Ongoing service provision will also require a robust strategy in order to plan for either the re-procurement of such services or providing them in-house. A detailed explanation of our procurement service can be found here.
We have been involved in 80% of all of the NHS PFI expiries which have taken place to date, and as such our team can provide clients with unrivalled experience, lessons learned and a full package of support to manage all aspects of PFI expiry. Our services include initial project planning, detailed due diligence, negotiations with the Project Company, remedial work strategies, transfer of services, property transfer, as well as dispute management and resolution where required. Our multi-disciplinary public sector team includes our specialist colleagues in Employment, Construction, Dispute Resolution, Regulatory, Insolvency and Property to ensure that all aspects of PFI expiry are considered.
Each PFI expiry is unique, and we offer clients an individually tailored service based on their specific circumstances and project agreement. Our comprehensive approach and strategic thinking allow us to provide clarity and reassurance to our clients throughout the transition process, ensuring that post PFI, the provision of services and facilities is successful and cost-effective.
Our large multi-skilled team has extensive experience advising clients with the expiry of their PFI contracts, including:
Expiry of contractual agreements
Assisting an NHS Trust with the expiry of its contractual arrangements including the TUPE transfer of several hundreds of staff, the failure of the services provider to consult with staff correctly, successfully defending claims for such failures and obtaining compensation for the poor condition of equipment made available to run the services.
Assisting an NHS Partnership
Assisting an NHS Partnership Trust with a complicated PFI expiry as the project arrangements which, due to a variety of novations and variations, were operating very differently than had originally been intended.
- We identified that Project Co had not been contributing to the Sinking Fund in accordance with contract requirements, and were able to ensure reimbursement of hundreds of thousands of pounds for works which the Trust had undertaken but which were the responsibility of Project Co
- We successfully negotiated with Project Co’s representatives to achieve more advantageous expiry terms for the Trust.
End-to-end support
We provided end-to-end support to an NHS Foundation Trust to ensure compliance with guidance and toolkits issued by the Infrastructure Projects Authority in the lead up to expiry as well as drafting bespoke due diligence questionnaires to address key issues such as asset and TUPE transfers. We liaised with experts to undertake condition surveys to establish the true status of the PFI facility prior to handback.
Assisting an NHS foundation trust
We have also assisted an NHS Foundation Trust regarding the expiry of its mental health PFI scheme which completed in September 2024. The Trust was the primary occupier but was not directly party to the PFI contract arrangements. We provided advice and support to the Trust in relation to the expiry due diligence exercise, negotiation of the expiry arrangements and post completion occupation arrangements between the NHS organisations.
Expiry of portfolios
We supported an NHS Foundation Trust with the expiry of a portfolio of PFI schemes (6 in total), where one scheme had been transferred to NHSPS and where the Trust did not need another of the facilities going forward. The land on which the facilities were built was in multiple ownership which meant very careful consideration was needed in respect of title matters. TUPE transfers required some thought also as FM staff operated across all schemes not just those which our client wanted to retain going forward.
Preparation for expiry of PFI schemes
Having previously advised on the negotiated voluntary termination of one of its PFI schemes, we are now assisting an NHS Foundation Trust in the south of England in relation to its preparation for the expiry of another four of its PFI schemes. At this initial stage, we are undertaking a comprehensive review of the Project Agreements, in the context of expiry, and advising the Trust on relevant provisions, necessary action and recommended next steps.
Ensuring facilities meet contract requirements
Assisting an academy trust in preparing for expiry with a particular focus on PPM failures and seeking to ensure that facilities are in accordance with contract requirements.
Multi facility PFI schemes
We are advising another NHS Foundation Trust on the expiry of its PFI scheme which comprised 2 facilities – one a medium secure mental health unit and the other for staff accommodation. This scheme expired in September 2024, and is subject to a residual value payment which in accordance with contract provisions is subject to the decision of an arbitrator. This scheme includes the need for the post expiry valuation of ‘dilapidations’ including fire stopping defects.