Do You Know What it is Yet?
First clue.
Second clue.
UPDATE: All I know is that a fellow blogger (Dizzy Thinks) is well on the way to cracking this story...
UPDATED UPDATE: And another blogger (Cherrypie) is on the trail from another angle with the MOD.
UPDATED UPDATED UPDATE 02:09 Dizzy Thinks There she blows!
7 comments:
Ah yes, due to a change in the rules the all have to go back on the books!
Cherrypie: I don't know. I am almost totally innumerate, and cannot work out my own finances. However, I know there is a story in there somewhere. Please feel free to contribute to build it and/or enlighten me.
I pick up on bits of this from my interest in the Defence Training review which is a PFI.
I did a bit from a Private Eye Article here. It explains briefly about how the rules changed for PFI and it has to go back on to the Government's books. Originally the payments were deferred until later.
The bit from the quote I mentioned from the book squandered is also worth looking at too.
From this Sunday Herald report:
...incoming (April 2009) changes to the rules on public private partnership and private finance initiative (PPP/PFI) projects. From April 2009, the long-term costs of the schemes will move "on balance sheet" for the first time. The intent is to make the government's books more transparent.
The Contract Journal has this in March 2008:
PFI accounting rule changes delayed until April 2009
13 Mar 2008
By Carol Millett
The introduction of new international accounting rules, which will put up to £30bn of PFI schemes on the Government's books, has been delayed until April 2009, CJ understands.
However sources say the Treasury has asked all Government departments to begin supplying shadow information on their PFI schemes immediately, in the run up to the introduction of new rules.
The introduction of the International Financial Reporting Standards will see most off-balance sheet PFI schemes go back onto the Government's books.
Due to be introduced in April, CJ understands the deadline has been extended by a year. The delay was prompted after the MoD and Health Department warned they were not prepared for the transition.
There is an Oxford University News Release PDF of 19th November 2008 here.
Cherrypie: Thanks. I do remember glancing at this post of your's at the time, however, as I was not aware of the impending doom it's significance escaped me. Accept my humble apology. Let's fit the pieces into the jig-saw puzzle.
S: Thank you for your contribution.
I have a nasty feeling that by not taking the PFI into account on the national debt, we're heading towards the land of the Rising Sun...
An earlier March 2007 article from the Contract Journal:
PFI deals to go on balance sheet
09:00 28 Mar 2007
By Carol Millett
All PFI deals are to go on the government’s balance sheet. The move has been triggered by the Treasury’s decision to adopt International Reporting Standards, announced in last week’s Budget.
It follows a critical report from the Financial Reporting Advisory Board (FRAB) last month. The report raised concerns about the way Treasury records its PFI financial transactions, many of which are off-balance sheet.
The report was particularly critical of Treasury accounting guidance known as Technical note 1.
The FRAB working group said this has led to an underestimation of government debt and is littered with ambiguities and inconsistencies.
A Treasury spokesman said it is too early to say whether PFI consortia will be expected to take PFI deals onto their balance sheets under the new rules.
A question asked on 23rd February 2007 in the House of Commons on Technical note 1 failed to elicit an answer....As also did this question of 26th February 2007, referring the questioner back to the same non-answer, 3 days earlier...
A paper by PriceWaterhouseCooper: The value of PFI - Hanging in the balance (sheet)?.
The report does not mention whatsoever the words:
Interest rate
Economy
Recession
but sings the praises of PFI schemes (as one would think since PWC share of the fees collected in the accounting involvement/administration of such schemes).
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