1.126 The Green Book requires public bodies to identify both the costs and the benefits that arise from public investment. It also encourages public bodies to monetise as many benefits as possible, including hard-to-value, intangible benefits15. In their OBCs, Procuring Authorities will identify and value benefits that arise from the project.
1.127 The Spreadsheet focuses exclusively on those economic cash flows that differ as a result of procurement method used. Therefore, although the Spreadsheet ignores the economic impact of benefits that are similar under both procurement methods, Procuring Authorities should take account of Non-Market Impacts that can be monetised and which are directly associated with the procurement method chosen.
1.128 Where, for example, the scope for innovation in the provision of the required service or project is judged by the Procuring Authority to be high, a case could be made for ascribing a value to innovation for the PFI Option. Although difficult to quantify, valuing innovation may be particularly relevant where:
• the asset and/or associated service modelled for the purposes of determining the Conventional Procurement Option is acknowledged to be based on practices that are conservative;
• good evidence exists that approaches to the delivery of an asset and/or service that differ to those assumed for the Conventional Procurement Option are in common use in related sectors, in other parts of the country or perhaps even, in other countries
• the asset and/or associated service modelled for the purposes of determining the Conventional Procurement Option is subject to obvious physical or service constraints that would not be imposed in the same way on PFI partners (forexample, where a PFI partner might be able to offer a significantly different balance between new and refurbished buildings to that in the Conventional Procurement Option).
15 Annex 2 of The Green Book (www.hm-treasury.gov.uk/greenbook)