The Treasury has finally published accounting rules for private finance initiative deals, a move welcomed by business and the profession as clearing up the confusion surrounding public-private partnerships.
The guidance is intended to help negotiators transfer most of the risk to the private sector, so the projects can be taken off the state’s balance sheet.
Accountant Robin Herzberg, concessions officer at Tarmac, said the guidance was a ‘major step forward’ and would provide clarity for future PFI deals.
‘We no longer have this worry that the pool of projects will be on the government balance sheet. From now on projects can be driven by value-for-money rather than the accounting issues,’ he explained.
PFIs were introduced by the last government to get expenditure off the state balance sheet – a move that will prove crucial if the UK is to enter into the European economic and monetary union.
Ken Wild, who chaired the ASB committee on PFI, said he expected the long-running debate over PFI accounting treatment to be finally laid to rest following publication of the guidance.
‘It is a serious attempt to take our original document and put it into terms where people without accounting knowledge can apply it and come to sensible answers,’ Wild said.
Andrew Tyrie airs views on the Finance Bill, 'Making Tax Policy Better' report, and Brexit
In our latest managing partner Q&A looking towards 2017, CVR Global's Richard Toone talks about recruitment, and the potential threat of competition from the legal sector, as key issues for the firm in the coming year
Deloitte to avoid tendering for government contracts over the next six months, to appease Theresa May following consultant's report that painted a less-than-flattering picture of Brexit plans
In our first Q&A looking towards 2017, Menzies senior partner Julie Adams flags up increasing digitisation, aligned with more hands-on consultative services, as the key mix for her practice