|
|
 |
|
| |
Top e-government news, updated daily, and regular features from the top people in the public sector.
|
|
|
|
|
 |
|
| PFI: changes ahead |
|
New moves to speed up the procurement of PFI contracts, while introducing greater scrutiny of bidders and their proposals, were outlined in the Treasury’s latest review of its PFI programme, published last week.
The review, PFI: Strengthening Long Term Partnerships, signals the government’s ongoing commitment to PFI, revealing a £26bn pipeline of more than 200 projects due to be signed in the next four or five years.
It promises to streamline the procurement process, but also sets new thresholds for PFI providers, particularly soft service providers, which, it claims, are failing to deliver sufficiently improved standards.
Moves to speed up the PFI programme include greater training and increased support for public sector bid teams and more accurate costing and greater scrutiny of schemes before they go to market. Clients will also be expected to provide more upfront design work and greater affordability information, so bidders can better assess the client’s needs.
Bidders’ financial robustness will be subject to greater scrutiny, as well as their bids, with new approval points set, particularly before the appointment of the preferred bidder. Bidders’ offers of operational flexibility will also be more closely assessed in an attempt to protect the client from performance and delivery terms that prove inadequate. PFI contracts will also be amended to allow clients to terminate contracts more easily and with fewer financial penalties.
The review also raises concerns about the standard of soft service provision. It follows research by Partnerships UK, showing that, while PFI soft services are generally no worse than those provided in traditionally outsourced contracts, they had failed to deliver a step change in delivery. As a result, the Treasury plans more rigorous tests to justify the use of soft services in PFI contracts.
In addition, PFI contracts with soft services will, in future, be subject to periodic market testing rather than just benchmarking.
An “operational task force” to support operational PFI contract managers is also planned, as are measures to smooth PFI schemes’ transition from bid to operational phase and the possible introduction of an initial period of “shadow running” on new PFI schemes.
The Treasury also signalled changes to the way PFI schemes will be funded in future, with proposals to introduce debt funding competitions on projects over £50m. But the jury is still out on credit guarantee finance (CGF) and equity funding competitions, with CGF being trialled, for a third time, on Knowsley’s Building Schools for the Future (BSF) scheme. The BSF programme has also been targeted by the Treasury, according to the review, to test drive framework funding vehicles.
The review also reveals plans to test a new vehicle for delivering PFI, known as the project delivery organisation (PDO). Sources say PDO will be tested on around five schemes from the Department of Health’s new community hospital or “poly-clinic” programme.
PDOs are providers that will oversee the delivery of multiple, bundled PFI schemes, which will include the provision and management of soft services, equipment, training and some technical or clinical services as well. |
|
|
|
