1.93 Operating Expenditure represents those costs incurred by the Procuring Authority in operating the asset and/or running the services that are included within the scope of the opportunity to be presented to the private sector if the PFI Option is to be pursued. Expenditure which falls outside the scope of PFI services (for example, clinical staff costs for PFI hospitals) are excluded in the Spreadsheet, as they are assumed to be constant between the two procurement methods. Operating Expenditure typically includes, amongst other things, buildings and grounds maintenance costs, the costs of providing ancillary services, such as cleaning and catering, overhead costs and insurance. The Spreadsheet enables Operating Expenditure to be incurred before all Capital Expenditure has been incurred. This may be particularly relevant where projects have a prolonged or staged construction profile.
1.94 The Input Value of Operating Expenditure will vary from project to project. It will, therefore, need to be determined by the Procuring Authority in light of appropriate in-house and professional advice. The Spreadsheet enables Procuring Authorities to divide Operating Expenditure between wage and salary (i.e. employment) and other costs. Where there are only a very small number of employees, Procuring Authorities may aggregate the Operating Expenditure. Where this is the approach, the relevant aggregated values should be entered in the OpEx (non employment) input cells, and a value of 0 entered into each OpEx Employment cell. Procuring Authorities should take into account the size of the transaction and the percentage that employment costs represent as a share of total OpEx when determining whether or not this approach is appropriate.
1.95 Operating Expenditure should be set at the level that the Procuring Authority estimates is required to provide a level of service that is common to both the Conventional Procurement Option and the PFI Option.