1.1 In August 2004, the Treasury released its Value for Money Assessment Guidance replacing Treasury Taskforce 'Technical Note 5' for Private Finance Initiative (PFI) procurements. This introduced a new three stage process to assess the Value for Money (VfM) of PFI schemes, summarised below:
• Stage 1 - Programme Level Assessment to ensure that PFI is only considered for use in those programmes where it is appropriate and is likely to represent good VfM;
• Stage 2 - Project Level1 Assessment requiring an upfront procurement appraisal at Outline Business Case (OBC). This replaced the previous Public Sector Comparator (PSC) and identifies the aspects that are key to VfM; and
• Stage 3 - Procurement Level Assessment which is an ongoing assessment during the procurement phase of a project to ensure that the desired project can be delivered in view of, for example, the competitive interest and market capacity.
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1 Please see Box 2.2 for further explanation of these terms