The Latest PFI and PF2 Projects Data – 31 March 2025

In February 2025, we published an update on the latest available PFI project data at that time. On 26 March 2026, the National Infrastructure and Service Transformation Authority (NISTA) published updated figures, reflecting the position as at 31 March 2025. Below, we consider the latest data and the implications for the construction and infrastructure market.

The data is a year in arrears but provides transparency and insights into UK infrastructure financing and Private Finance Initiative (PFI) and Private Finance 2 (PF2) projects procured by central government departments, or their arms lengths bodies (including NHS Trusts), and local authorities who receive PFI grants. It also includes projects delivered by the devolved administrations in Scotland, Wales and Northern Ireland.

Where are we now?

As of 31 March 2025, the data shows there were 654 operational PFI projects with an original total capital value of £49.6bn¹. The two largest departments in the portfolio were the Department for Education (DfE) and Department of Health and Social Care (DHSC). The DfE had 169 ongoing projects, and the DHSC 140 projects, which account for just under half (47%) of the total number of projects in the portfolio. The original total capital value of £49.6bn displays the significant long-term public sector investment commitments created through PFI, most of which will continue to generate Unitary Charge (UC) payments² for many years. However, eventually these UC payments will begin to decline as set out below.

During the financial year 2024-2025, £10.7bn of UC payments were made. According to NISTA, it is anticipated that this would be the peak of UC payments made. Out of the estimated remaining UC payments from 2025-26 until the final payment is made, this totals £128bn, £91.7bn of which is expected to be paid in the next 10 years until 2034-5. Following this 10-year period, the estimated UC payments decline will begin to rapidly accelerate until the 2048-2049 financial year reaching £0m.

Expiring projects

The decline in the UC payments may come as a result of the number of expiring projects increasing. In 2025, there were 14 contract expiries expected which NISTA predict will increase steadily to a peak of 65 in 2036 (driven mainly by the DFE and DHSC projects, mentioned above). Following this, the number of expiries per year decline rapidly, reaching just a few expiries in 2048. The data shows that:

• projects expiring between 2039 and 2042 account for 38% of total remaining UC payments; and
• 35% of the 654 projects were within 7 years of expiry.

All parties involved in such projects should have already begun preparing for expiry and proactively managing these projects through better project management. NISTA have released guidance, toolkit items and other documents relating to PFI contract expiry to help achieve better project management amongst other objectives as set out below.

PFI Contract Management Programme

To strengthen capability across the public sector in managing PFI contracts, NISTA has published a suite of PFI Contract Management Guidance and Toolkits through their PFI Centre of Excellence. The PFI Centre of Excellence provides expert support and advice to departments and contracting authorities to help manage the risks in operational PFI projects.

The aim of the PFI Contract Management Programme according to NISTA is for contracting authorities to have the “capabilities, knowledge and tools they need to manage their PFI contracts effectively” and to “confidently engage with their private sector partners”.

The Programme comprises of four key project elements:

• Contract Expiry
• Improving Operational Performance
• Building Capability
• Advice and Support.

The Guidance released by NISTA is significant, given the UK government’s emphasis on effective contract management as a key driver of value for money and service continuity across the contract lifecycle.

PF2 equity return data

As part of the release of the PF2 equity return data, the government require the disclosure of actual and forecast equity returns. The published data shows that for Priority Schools Building Programme Private Finance (PSBP) Projects across the North-East, North-West, Yorkshire and Hertfordshire, Luton and Reading all returned a marginal increase in the internal rate of return (IRR) for all shareholders across these projects. Despite the nominal IRR marginal increase from financial close to the reporting period of 31 March 2025, the largest nominal IRR increase from close to reporting was 0.88%³. The data highlights that PF2 projects are not yielding substantial margins and this may be one reason why the government announced at Budget 2018 that PF2 would no longer be used.

The future?

On 24 February 2026, the Minister for Secondary Care briefly discussed NHS PFI’s in the House of Commons. The Minister stated that their Department “will not be bringing back PFI” and “will be bringing forward a new public-private partnership model that will draw on lessons learned from the past, to ensure that we deliver the commitments of our 10-year plan.” The government’s step away from the earlier PFI model is re-emphasised by their ambition to introduce a new public-private partnership, as opposed to speculation of a new scheme ‘PF3’ as reported last year. We will continue to monitor future developments and opportunities in this space.

Beale & Co advise clients at all stages of a project or contract lifecycle. If you require support in managing your PFI and PF2 contracts and obligations, or legal advice to inform your discussions with interested stakeholders on such projects, please contact Nadir Hasan and Will Buckby, or your usual Beale & Co contact.

Article includes additional commentary from Kayleigh Rhodes

¹Capital value is the total nominal capitalised cost as recorded in the financial model at financial close

²The (usually monthly or quarterly) payment made to the contractor by the contracting authority / public sector client for the post-completion operational services such as lifecycle replacement expenditure and maintenance services.

³The Nominal Equity IRR is the projected nominal internal rate of return represents the return equity providers expect to receive over the whole life of the project, including the impact of inflation.