1.27 Since the Value for Money Assessment Guidance 2004 was issued, the Treasury has issued further reforms to the PFI process as set out in SLTP. This update of the VfM Assessment Guidance incorporates some of the new guidance set out in SLTP and strengthens the VfM test for PFI (See Box 1.4 below).
| Box 1.4: Additions to Value for Money Assessment Guidance Further detail is included in this update on the following areas: Sector Specific Contract lengths - highlights the need for sector specific caps on the length of PFI contracts, ensuring they reflect the optimal period over which the procuring authority wishes its Serv ices to be provided without unduly restricting long-term flexibility (para 3.8) Single Bidder Projects - clarification of circumstances where single bidder PFI projects may be allowed to proceed (para 4.9) Inclusion of Soft Service - strengthened test for rigorously assessing the VfM benefits of including soft services in PFI projects (para 4.25) Service changes - consideration of the balance between affordability and contractual flexibility in terms of increased costs for large and small changes in service (para 4.32) Flexibility - ways of considering the degree of flexibility in various financial structures proposed by bidders (para 5.22) |