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Fairness required that the Secretary of State should have consulted a local authority before changing the basis on which PFI payments were to be made.
25 June 2012
(1) Dudley Metropolitan Borough Council (B) sought to challenge by way of judicial review the decision of the Secretary of State for Communities and Local Government to alter the basis on which annual payments were paid under a Private Finance Initiative (FFI) scheme. Annual payments were paid to B for a project concerning information communication technology in local schools. Between 1999 and 2011 these payments were initially made on a ‘declining balance' basis. This meant that payments to B would persist beyond the length of the PFI contract. In 2004, changing the basis of the relevant PFI payments to the ‘annuity' basis was consulted upon and local authorities were given the option to switch to this basis of payment. This would mean that funding was limited to the life of the contract. B chose to stay on the declining balance basis.
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