Everybody needs to know when, where and how

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Walsall Council PFI contract

Walsall Council’s streetlighting PFI contract is set to be one of the first in the country to expire and revert back to local authority control. At Lighting Live in Daventry this February, the PFI’s contractor Amey and Walsall Council shared their respective experience and advice on managing the complex transition process.

Two years ago, we embarked on developing a hand-back plan for Walsall Council’s PFI contract, and we did so with no small degree of trepidation. As one of the first street lighting PFIs in the UK set to reach full expiry and return to the authority, Walsall is somewhat of a pioneer. Whilst there is increasingly some helpful guidance available, there is no industry standard or go to guide for closing out these long terms and complex contracts.

PFIs are not a niche sector: there are around 700 across the UK, with 31 in street lighting alone, worth approximately £2.63bn. Amey manages 21 of these contracts, and with nearly 50% of PFI contracts due to expire over the next five to 10 years; the scale of the upcoming transition across the country is significant.

At Walsall, from the outset, we focused not just on hand-back compliance, but on what comes next. Early consideration of post-PFI options – whether extending, re-procuring, insourcing, or adopting a hybrid model – is essential. Although extensions were politically unpalatable at the outset, the broader policy landscape is evolving, with ministers revisiting mechanisms for financing investment in infrastructure.

Open, honest, and sometimes challenging conversations have been encouraged.

A collaborative mindset

At Walsall, the collaborative relationship between council, contractor and SPV (special purpose vehicle) has been key.

PFIs are, by nature, long-term partnerships – Walsall’s runs to 26 years – and a constructive relationship at expiry is as important as at inception.

Rather than descending into adversarial behaviour, we therefore focused on common objectives: service continuity, asset integrity, public trust.

Open, honest, and sometimes challenging conversations have been encouraged, not avoided. This spirit of ‘respectful challenge’, as we described in our recent publication, fosters creativity and joint ownership of problems and solutions.

We worked together to interpret the original PFI contract, recognising that many standards, assumptions, and operational practices have evolved since its signature more than two decades ago. Formal hand-back provisions are often surprisingly vague, and mutual understanding of the intent, rather than mere literalism, has helped us avoid legal disputes.

Image of Walsall — At Walsall, the collaborative relationship between council, contractor and SPV (special purpose vehicle) has been key.

Transparent, risk-focused, and proportionate.

Setting the standard for asset handover

One significant achievement at Walsall was developing a detailed final survey plan. It defines asset performance standards, testing methodologies, survey processes, and reporting templates. This level of precision gives the authority, and ultimately the public, confidence in a smooth transition.

The final asset survey, to be undertaken two years before contract expiry, will be transparent, risk-focused, and proportionate.

Using models such as the Institution of Lighting Professionals’ GN22 guidance, we will target resources where risks are greatest and consider them in the context of nationally recognised standards.

Our shared ambition has been to eliminate surprises at hand-back, for either party. Early data reviews, shared dashboards, joint inspections, and regular reporting cycles all support this goal.

Direct partnership working with Amey, bringing in targeted professional support when needed.

Time, skills and political buy-in

Walsall’s PFI covers 32,000 streetlighting assets, with an annual service value of under £2m. While not the largest by value, the management complexities are significant.

Given the relatively modest service value, a key principle from the outset was to make every pound count. The council deliberately chose not to heavily rely on external consultants.

Instead, they invested in internal capability and direct partnership working with Amey, bringing in targeted professional support when needed. We were only able to do this because we gave ourselves time. Building the expiry plan took over a year and as expiry draws closer we are continuing to refine and develop the finer details of hand-back.

A significant challenge for authorities approaching PFI expiry is the shortage of technical and commercial expertise.

While Walsall benefits from a PFI manager with longstanding experience on the contract, addressing skills gaps remains critical – not just for managing hand-back, but for sustaining technical highway services in the long term.

Ensuring sufficient capability and capacity, both within the authority and through partnerships, has been central to our collective planning. Early investment in recruitment, training, and knowledge transfer will be essential to a smooth transition and future service resilience.

Transition can be a positive, professional journey for both authority and contractor.

Final thoughts: A shared journey

In summary, therefore, PFI expiry should not be an adversarial process. At Walsall, we have shown that with early preparation, honesty, a focus on shared goals, and detailed collaborative planning, transition can be a positive, professional journey for both authority and contractor.

As we set out in the presentation at Daventry: ‘Everybody needs to know when, where and how. Transparency is vital. Managing expiry is a joint project – and it must be worked at together.’

Four key takeaways for successful PFI expiry

Start early and plan in detail. Seven years is a minimum. Ideally allow ten. Build a detailed timeline, shared protocols, and a structured decision-making process.
Collaborate openly and honestly. Difficult conversations early on avoid major disputes later. Transparency prevents hidden agendas from undermining trust.
Understand your contract but interpret with maturity. Recognise operational realities and evolved standards. Mutual understanding is critical.
Learn from others. Case studies such as Walsall’s provide practical insights. Draw from others’ experiences to avoid ‘reinventing the wheel’.