PFI accounting rule changes delayed until April 2009

The introduction of new international accounting rules, which will put up to £30bn of PFI schemes on the Government's books, has been delayed until April 2009, CJ understands.

However sources say the Treasury has asked all Government departments to begin supplying shadow information on their PFI schemes immediately, in the run up to the introduction of new rules.

The introduction of the International Financial Reporting Standards will see most off-balance sheet PFI schemes go back onto the Government's books.

Due to be introduced in April, CJ understands the deadline has been extended by a year. The delay was prompted after the MoD and Health Department warned they were not prepared for the transition.

A Government source said: " the shadow running of the new rules is to minimise the burden and make sure the transition goes smooothly before implemetation in 2009. After all the private sector had five years to adjust to them."

About £30bn worth of PFI projects are currently not on the government’s balance books, including almost all PFI hospitals. This puts them outside the government’s sustainable development rule that no more than 40% of gross domestic product will be made up of borrowings.

But the new accounting rules will bring most back onto the public sector balance sheet, impacting on government finances.