As the first generation of UK PFI contracts begin to expire, public authorities are preparing to take back responsibility for hundreds of schools, hospitals, prisons, roads and other critical public assets. But successful handback is proving to be about much more than contractual compliance. A CIOB roundtable, held in partnership with Partnerships Bulletin, explored how experience is reshaping thinking on asset management, governance, capability and conflict avoidance as the sector prepares to deal with the transition.

Over the next decade, the UK will enter the busiest period yet for the expiry of Private Finance Initiative (PFI) contracts. Agreements signed in the late 1990s and 2000s are now reaching the end of their terms, with expiries expected to peak around 2036. For public authorities, the challenge extends well beyond bringing contracts to a close. It is about ensuring that essential public infrastructure remains safe, operational and fit for purpose as responsibility transfers to its next phase of stewardship.

Recognising the scale of that challenge, the National Infrastructure and Service Transformation Authority (NISTA) has expanded its support for contracting authorities through guidance, asset condition surveys, expiry health checks and data collection. It is also preparing to launch a new Conflict Avoidance Forum (CAF), intended to help parties resolve emerging disagreements before they develop into formal disputes.

Against that backdrop, CIOB and Partnerships Bulletin convened a roundtable bringing together representatives from government, local authorities, the NHS, advisers, investors, management service providers and facilities management organisations to explore what experience is revealing about successful handback.

Handback is a programme, not an event

One of the strongest themes to emerge was that, as experience of PFI expiry grows, handback is increasingly being viewed not simply as a contractual milestone, but as a long-term programme of asset, information and relationship management. This programme approach provides a clearer framework for decision-making, with defined objectives, governance, milestones and escalation routes, while enabling lessons from early handbacks to inform those that follow.

Several participants described the difficulty of persuading boards and senior leaders to see expiry as a significant organisational issue. As one NHS participant reflected, "This was a strategic infrastructure risk rather than just a contract expiry event."

This distinction is useful because successful handback requires governance, resources and decision-making well beyond the contract management team. It affects future service delivery, capital planning, operational resilience and the long-term stewardship of public assets.

Participants also argued that preparation should begin with a clear understanding of what the authority wants from the asset after expiry. In some cases, facilities will continue to play an important operational role for many years. In others, service needs may have changed, creating opportunities to repurpose assets or rationalise estates.

Viewed in that light, handback becomes an opportunity to align the condition of the asset with its future purpose. Several participants observed that where authorities have a clear strategy for the asset beyond expiry, they are often better placed to negotiate pragmatic solutions that deliver better outcomes than rigid adherence to contractual positions alone.

In other words, the expiry of a PFI contract is not the end of the asset's story.

Success at handback is earned over decades

Although much guidance related to handback focuses on the seven years leading up to expiry, the discussion repeatedly returned to a broader point: by the time formal handback planning begins, many of the factors that determine success have already been shaped by years of day-to-day contract and asset management.

Participants highlighted familiar operational challenges: incomplete asset registers, missing fire strategies, inconsistent record keeping, multiple changes of facilities management or management service providers, and uncertainty over the condition of assets after decades of operation.

These issues rarely emerge suddenly. Rather, they accumulate gradually over the life of the contract. Once facilities management providers fall significantly behind planned lifecycle works, one participant argued, they rarely recover that position completely. Deferred investment accumulates, documentation becomes harder to reconcile, and unresolved issues eventually surface during handback, when responsibilities are subject to far greater scrutiny.

This illustrates the wider principle, which is that handback problems are seldom created during the final years of a contract. More often, they are the cumulative consequence of operational disciplines that have gradually weakened over many years.

Several participants therefore argued that good handback is built on good contract management throughout the operational life of the project. Collecting accurate information, maintaining asset records, documenting changes and managing lifecycle investment consistently all reduce uncertainty when expiry approaches. Organisations should begin, as one participant put it, "with the end in mind", building the information needed for handback progressively rather than attempting to reconstruct it years later.

Relationships matter as much as contracts

Participants acknowledged that disagreements are inevitable within contracts running to thousands of pages and lasting 25 or 30 years. Different interpretations of contractual obligations should not, in themselves, be regarded as failures.

The greater risk is when disagreements become entrenched and relationships deteriorate. Several participants expressed concern that some projects had become increasingly consultant-led, with parties adopting highly adversarial positions that made practical resolution more difficult. Rather than helping clients achieve successful outcomes, this approach could encourage parties to pursue contractual arguments to their limits, consuming time and resources without improving the condition of the asset or the quality of the eventual handback.

Other participants cautioned that authorities should retain ownership of strategic decisions, using advisers to support rather than replace informed client leadership.

Participants also emphasised that many disputes develop slowly. Asset condition, lifecycle investment, contractual interpretation and governance issues are often known by one or more parties long before relationships begin to deteriorate. As one participant observed, "There is no excuse for not knowing about the asset information, not knowing the contract... when these crashes happen, they're in slow motion."

That perspective reinforced the importance of addressing concerns early, before positions become fixed, relationships deteriorate, and legal processes begin to dominate.

From dispute resolution to conflict avoidance

It was against this backdrop that NISTA outlined its plans for the Conflict Avoidance Forum.

Participants broadly welcomed the initiative, which is intended to provide independent early neutral evaluation and, where appropriate, facilitated mediation by specialists with practical PFI expertise.

The emphasis on conflict avoidance is deliberate. CAF seeks to intervene before disagreements become litigation, helping parties identify the underlying causes of conflict while preserving working relationships.

There was also support for NISTA's ambition to build an anonymised body of learning from cases over time, allowing future projects to benefit from greater consistency while respecting commercial sensitivities.

Underlying this discussion was a broader recognition that these are not ordinary commercial assets. Hospitals, schools, prisons, roads and other public infrastructure continue to provide essential public services regardless of where contractual responsibilities begin or end. Avoiding unnecessary conflict is therefore about much more than reducing legal costs or improving commercial relationships. It is also about maintaining the continuity of services on which communities depend while complex contractual transitions take place.

Several participants suggested that future project finance contracts could avoid the kinds of problems encountered in PFI by embedding periodic strategic reviews or other governance mechanisms to identify emerging issues long before expiry becomes imminent.

Building capability for the next decade

Running through the discussion was a recognition that the UK is entering an unprecedented phase of PFI contract expiries. As they accelerate towards their expected peak during the 2030s, demand for experienced practitioners will increase across both the public and private sectors.

Participants pointed to familiar pressures. Public authorities often struggle to secure dedicated resources for handback programmes. Private sector organisations face similar recruitment and retention challenges. Experienced practitioners frequently move on once individual projects conclude.

Several participants questioned whether the sector is making the best use of the expertise it is developing through the first wave of handbacks. One idea was the concept of an "academy of experts" – not necessarily a formal institution, but a systematic way of retaining and sharing the hard-won experience of those who have already managed complex handbacks. 

Whereas the proposed Conflict Avoidance Forum would help resolve issues within individual projects, this idea reflected a wider ambition to strengthen capability across the system by preventing valuable knowledge from being lost as projects conclude and people move on.

Participants also highlighted the importance of making better use of the guidance that already exists. NISTA's growing library of templates, health checks and practical tools are providing a consistent framework for managing expiry, yet participants noted that some organisations remain unaware of these resources or continue developing their own approaches unnecessarily.

Taken together, these discussions suggested that successful handback increasingly depends on combining published guidance with experienced judgement and disciplined operational management.

A different phase of the PFI story

Much of the public debate about PFI has focused on procurement, financing and the value of the model itself. As contracts begin to expire in greater numbers, attention is shifting towards a different challenge: managing the transition from long-term private operation to the next phase in an asset's life.

The roundtable suggested that the ingredients of successful handback are becoming clearer. Authorities that approach handback as a structured programme, with clear governance, milestones, mechanisms for resolving emerging issues and a commitment to capturing learning, appear better placed to achieve successful outcomes. Effective programme management, consistent contract management, good asset information, constructive relationships and experienced leadership all appear to matter as much as the contractual provisions themselves.

That experience is also beginning to shape the wider support available to the sector. NISTA's guidance, health checks and proposed Conflict Avoidance Forum all reflect a growing body of practical learning, while discussions about retaining expertise point towards a broader recognition that capability itself has become a strategic issue.

As more contracts reach expiry over the coming decade, the question is becoming less about how to interpret PFI contracts and more about how to apply the knowledge, behaviours and institutional experience needed to manage their successful conclusion. Ultimately, the objective is to ensure that the public assets they support continue to serve communities long after the contracts themselves have ended.

The roundtable was conducted under the Chatham House Rule to encourage open and frank discussion. CIOB is grateful to all participants for generously sharing their time and experience.