Question to the Department for Education:

To ask the Secretary of State for Education, (a) what arrangements her Department has in place to help ensure that schools and mulit-academy trusts who have entered PFI contracts for school buildings remain able to afford interest payments on those contracts and (b) what recent assessment she has made of the adequacy of those arrangements in the context of rising inflation and interest rates.

All private finance initiative (PFI) schools contracts have been entered into by either local authorities or the Secretary of State for Education. PFI schools contracts include an interest rate hedge which is agreed at the point of contract signature to secure a fixed rate of borrowing until contract expiry. This means that the payments made to the PFI contractor do not fluctuate as interest rates change.

An element of the payment owing to PFI contractors is typically index linked but the impact of rising inflation is not an issue that is unique to PFI contracts.