6.2.  Value for money

Figure 18 shows how authorities perceived value for money at contract letting, and how they perceive it now. 56 percent of authorities currently believe that the contract offers good or excellent value for money.  Only 1 authority thought that the project offered poor value for money; in this case bank interest rates had fallen significantly since financial close, but the project had not been refinanced to the authority's knowledge.

Figure 18: Authority perceptions of value for money.

26 projects out of 31 that responded (84 percent) stated that a Public Sector Comparator (PSC) had been prepared. The median saving versus the PSC was 6 percent; the mean was 13 percent reflecting extremely high savings in a few projects.

13 projects out of 36 that responded (36 percent) said that post-financial close evaluation had been carried out.

In interviews several authorities noted the difficulty of proving value for money in relation to changes, because of the lack of competitive pressure. One authority also commented that insurance costs were significantly higher for PPP projects, which had an impact on value for money compared with conventionally procured projects.