What Might be the Scale of Off-Balance Sheet Finance?
One way of examining the potential scale of off-balance sheet finance is to see what the long-term cost commitments are for operational costs. However, the government does not release these figures in most cases, citing commercial confidentiality. Let’s examine a sample where we can obtain the data. We looked at 18 education projects and 44 health projects where the running costs were available. The 18 educational projects’ capital costs were 868 million and the committed running costs were 2.787 billion. Running cost commitments expired in 2032. As can be seen by inspecting the following graph, there is a 20 year period where the commitment is a steady 100 million per annum. The 44 health projects’ capital costs were 210 million and the committed running costs were 1.041 billion. Running cost commitments expired in 2036. For health, there is a 20 year period where commitments are a fairly steady 30 million per annum. Given that we do not have running costs for most PFI projects, we ca
