2.14 HM Treasury's Green Book and the PFI Value for Money Assessment Guidance together set out the core principles and approach for analysing the investment case and value for money of projects4. The quantitative value for money assessment model and associated user guide will shortly be updated to reflect changes in market conditions. Departments should ensure they use this up to date model and user guidance which can be found on HM Treasury's website5.
2.15 HM Treasury last published value for money assessment guidance for PFI projects in November 2006. To ensure we remain at the forefront of international standards and to reflect lessons learnt over the course of the last four years, HM Treasury will undertake a review of current guidance.
2.16 The review will reflect on areas of the guidance that require updating and the challenges raised by other parties. For example, the current guidance focuses on ex-ante evaluations and should be expanded to ensure the value for money of projects continues to be assessed throughout their life, value for money continues to be achieved and valuable information is provided for new projects. This is in line with the NAOs recommendations on value for money.
2.17 The review will consider the form that ex-post value for money assessments for PPPs should take, including how various groups of costs and benefits should be incorporated within the assessments, for example, how to treat costs that have already been incurred.
2.18 We will also further define what constitutes a "material change" for the purposes of rerunning a value for money assessment, in line with recommendations by the NAO6. Any revisions or additions to existing guidance will remain consistent with the Green Book.
___________________________________________________________________________
5 http://www.hm-treasury.gov.uk/ppp_vfm_index.htm
6 http://www.nao.org.uk/idoc.ashx?docId=D430D1C9-6A12-40CF-BC43-B5C0CBF6561F&version=-1