Millions of pounds of public money is being lost each year on PFI contracts because government managers do not have enough commercial experience to deal with private sector companies, a Commons investigation has concluded.

Millions of pounds of public money is being lost each year on PFI contracts because government managers do not have enough commercial experience to deal with private sector companies, a Commons investigation has concluded.

More must be done to ensure that the deals between the public and private sector, which encompass everything from school building to defence contracts, provide better value for money, the Commons Public Accounts Committee said.

In a report to be published today the Commons committee states that many public sector authorities are "not doing a good job" of managing Public Financial Initiative (PFI) contracts. Under PFI public bodies enter into long-term contracts with private firms to design, build and operate assets such as hospitals or schools. There are now more than 500 projects with a combined capital value of £57bn, according to the committee.

The cross-party group of MPs said it was inevitable, over the course of 25 to 30 years of operation, that changes would be needed to the services and assets provided under PFI projects, but they warned there were large variations in the management of such deals.

More than 15% of the projects are not being managed on a full-time basis, according to the committee. Many contract managers do not have enough commercial expertise and MPs found that a third of contract managers at PFI hospitals and a sixth of contract managers of PFI schools have described their teams as "under-resourced".

Tory MP Edward Leigh, chair of the PAC, said this was "particularly worrying" for taxpayers because changes were made to PFI services at a cost of £180m in 2006.