1.21 PFI has also developed a relatively high level of scrutiny and central support, both at departmental level and from the Treasury. For example, local authority procured PFI projects are subject to review by the Project Review Group and more complex central projects by the Major Projects Review Group; both chaired by the Treasury. Chapter 5 sets out the current scrutiny arrangements for major procurements, including PFI projects, and the support available for projects in operation. It sets out how the Government will improve its ability to scrutinise projects, particularly at an early stage, and how this is intended to evolve into a more systematic, value-added, risk-based approach to the scrutiny of major public investment projects. It also provides an update on the progress the Government is making in enhancing public sector procurement skills.
1.22 Box 1.3 sets out the key measures of Infrastructure procurement: delivering long-term value.
Box 1.3: Key measures Infrastructure procurement: delivering long-term value sets a direction of travel. While the Government will continue to use conventional procurement and PFI techniques where they represent value for money, this document seeks to stimulate innovative procurement approaches that may in some circumstances provide better value for money for the public sector in addressing the complex infrastructure investment challenges ahead. It does, however, also announce a number of specific measures. To improve the procurement process, applicable to any delivery model, for large, complex infrastructure projects and programmes, the Treasury will: • issue guidance on conducting tenders for complex projects under Competitive Dialogue procedures; • issue guidance on project maturity - the state of development infrastructure investment plans should have before the public sector formally engages with potential private sector contractors; • move to a risk-based approach to scrutiny, with scrutiny taking place earlier in the procurement cycle and with increasing focus on the delivery model and the procurement process; and • continue to support a wide-ranging programme aimed at enhancing public sector procurement and intelligent client skills. To support the consideration of a broader range of potential delivery models, this document provides high level value for money assessment principles. The Treasury will also: • expand Value for Money Assessment Guidance for PFI to cover a broader range of approaches to complex procurement; and • update and re-issue guidance on joint ventures. To enhance the efficiency of PFI projects, both existing and future, the Treasury will: • commission a survey of operational PFI projects and the current issues they face; • work with departments to consider whether and what reforms to the PFI Credit system might be made; and • issue guidance on specific PFI financing issues (related to refinancing, primary equity returns, underpinned debt and public sector capital contributions). |