For the operational phase of projects, there may be merit in the Scottish Executive seeking to collect information on unit costs of benchmarked services18 e.g. soft FM. This might be of some use to public sector managers within and potentially across sectors in managing their contracts. (An alternative or complementary initiative would be to promote and support networks of contract managers. This is particularly important in sectors such as health, where most contract managers are responsible for a single PPP contract.)
More generally, we do not believe that Scottish Executive should not prioritise the central collection of this data at this stage. This reflects two observations:
First, we do not believe that there is currently a standard set of data that could be collected centrally and used to evaluate systematically the performance of Scottish PPP projects. In addition few sectors have yet developed standard performance indicators for all PPP and non-PPP projects.
Second, we believe that further work would be needed to understand the project specific factors (within each sector) that would lead to explainable variations in cost and efficiency19.
Instead, our judgement is that some or all of the following approaches might be pursued:
• Institute a periodic audit of all PFI schemes along the lines of the current work - but also looking in detail at a smaller number of projects within a particular sector.
• Commission detailed studies into some of the specific components of PPP contracts identified in this Study (e.g. on the levels of FM service specified in the contracts and the relative costs of delivery in different procurement models).
• Commission sector specific studies that (i) seek to define a small number of standardised performance indicators and cost data that could be collected for PPP and non-PPP projects; and (ii) where appropriate carry out more detailed benchmarking studies of performance
Each of these ideas is discussed in more detail below.
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18 Benchmarked services here relates to the elements of the contract (e.g. soft FM services) were there is an explicit requirement or allowance for benchmarking of costs.
19 This is likely to involve a significant 'benchmarking exercise' of the kind that utility regulators undertake to understand the efficiency of regulated companies.