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For those involved in the PFI sector, it can often feel as though the terms "handback" and "expiry" are everywhere. However, of the 660+ operational PFI contracts in the UK, only around 30 have actually reached expiry. We are therefore only now beginning to move beyond the initial phase of expiry planning and into a period where practical lessons are becoming available. By 2030, around 140 projects will have reached the end of their contractual term.
If your authority has a PFI scheme due to expire within that timeframe, the National Infrastructure and Service Transformation Authority (NISTA) will likely already have undertaken, or be preparing to undertake, its expiry health check, and some degree of expiry planning should already be underway. The extent of that planning will naturally depend on how close the project is to expiry. NISTA's seven-year review programme is now extending to schemes expiring up to 2033, marking the start of the peak expiry period. Between 2032 and 2037, more than half of all remaining PFI projects are expected to expire, making early preparation increasingly important for contracting authorities.
Whilst the "Five Ps" may be a cliché adage, it couldn't be more relevant to PFI expiry. However, rather than repeating familiar warnings about starting early, we thought it would be more useful to share five practical insights drawn from our experience advising on some of the most recent, and largest, PFI expiry projects in the country.
As you approach expiry, your Project Agreement is over 20 years old and is likely to have been amended a number of times through formal variations (likely), settlements (possibly) and operational changes (definitely). Personnel have moved on, records may be incomplete and institutional knowledge has often been lost. Before any meaningful expiry planning can begin, authorities should undertake a detailed review of the contractual framework to identify which documents govern the current position and how they interact. This process regularly exposes gaps in information, ambiguities in risk allocation and provisions that have never been tested in practice. A clear understanding of contractual rights and obligations is the foundation of any successful expiry strategy.
Asset condition surveys inevitably attract significant attention, but contracting authorities should recognise that expiry disputes are often driven by contractual interpretation rather than engineering evidence. Key issues frequently include handback standards, lifecycle obligations, residual life requirements and the contractual remedies available where deficiencies are identified. The legal challenge is understanding how these provisions operate and ensuring the authority's position is protected before disagreements arise. Authorities that consider these matters only once the formal handback process has begun may find that options have narrowed and negotiating leverage has diminished.
PFI expiry requires input from legal, technical, estates, finance, procurement and operational teams. In many sectors, additional stakeholders may also need to be engaged. Effective governance is therefore essential. Authorities should establish clear reporting structures, decision-making responsibilities and document management processes well in advance of expiry. Records such as maintenance histories, asset registers and operational manuals can become critical evidence when assessing compliance with contractual obligations. Experience shows that weak governance and poor information management can create avoidable risks and undermine an authority's position during key negotiations.
A successful handback is not the same as a successful transition. Authorities must decide how services will be delivered after the contract ends and ensure appropriate preparations are made. Clearly that will depend on the sector and type of asset, however post-expiry solutions could be insourcing, reprocurement or an alternative delivery model. Whichever it is, a range of legal and commercial issues will arise. Procurement requirements, TUPE implications, property matters, ICT systems, data transfer arrangements and future maintenance responsibilities all require early consideration. Authorities that focus exclusively on handback can overlook the wider operational challenges that determine whether public services continue effectively once the concession has expired.
Authorities must be prepared to enforce their contractual rights where necessary, but the most successful expiry projects are usually those in which disputes are avoided rather than won. Early identification of issues, proactive information gathering and structured engagement with the project company can significantly reduce the likelihood of costly disagreements. The objective should be to resolve potential problems before they escalate, whilst still protecting the authority's position. Ultimately, successful expiry is about securing a smooth transition, preserving value for money and ensuring continuity of public services long after the contract has come to an end.
If your authority has a PFI contract due to expire within the next seven years, the team at Womble Bond Dickinson would welcome the opportunity to discuss your plans and share our experience of supporting authorities through the legal, commercial and operational issues arising on PFI expiry, handback and service transition.
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