The challenge
Stoke-on-Trent City Council's schools PFI was due to expire in October 2025. The Council commissioned Grant Thornton to support its expiry planning process in mid-2023 from a financial and commercial perspective.
The Council required a viability assessment of different options to best address the financial issues facing other parties to the PFI, while ensuring that critical services provided to schools did not reduce or fall away.
The Council and schools in the PFI also faced rising energy bills, driven by indexation calculations in the PFI contract. The Council needed robust, defensible analysis to negotiate and understand its options.
How we helped
We supported the Council through each stage of the expiry process. We reviewed cash flow forecasts and quantified funding gaps, then produced financial models for the Council's position under different scenarios. This provided the Council with an evidence base for negotiation.
In parallel, we unpicked the Unitary Charge payment mechanism against the Project Agreement, reconciling indexation factors and explaining in plain terms why charges to schools had risen so steeply.
As disputes emerged, we validated invoice charges against the agreed schedule and calculated interest owed on withheld payments, structured so the Council could communicate this clearly with the PFI schools.
The results
The Council entered contract expiry with a clear, quantified understanding of its financial position under each handback scenario, strengthening its negotiating position.
Our indexation analysis provided the Council with a defensible explanation of Unitary Charge movements, while our interest calculations – covering over 80 schools – gave the Council figures it could stand behind in recovering disputed and undisputed sums related to operational performance.
As the PFI reached expiry in October 2025, the Council was equipped with the financial clarity and documentation ensure expiry took place in line with the PFI contract, in the context of financial and operational challenges faced by other parties to the agreement.
"The team are responsive to requests, approachable and adaptable. They have even assisted the Council by recording a video explaining how the PFI Unitary Charge is calculated. I really value the team’s readiness to listen to our requirements – they have been a pleasure to work with."
About our team
