5.15 The Government established the Project Review Group (PRG) as an interdepartmental body to test the quality of local authority PFI projects prior to entering their procurement stage, acting as final gatekeeper for the delivery of PFI credit funding to local authorities. No PFI project can be submitted to the PRG before the relevant government department has agreed that it meets policy objectives, is likely to provide value for money and is suitable for a PFI approach.
5.16 Once departments have accepted that a scheme should be prioritised for development, the PRG then reviews the business case to assess the extent to which the project matches the 12 key criteria (shown in Box 5.2).
Box 5.2: Checking project deliverability - the role of the Project Review Group Key criteria for the PRG in assessing the viability of projects are: • affordability; • output specification; • design quality; • risk allocation; • key terms and conditions; • bankability; • use of appropriate comparators; • indicative timetable; • project team; • suitability of advisors; • commitment of sponsors/users; and • statutory process. |
5.17 By evaluating proposed local authority PFI schemes, the PRG provides:
• a review of the commercial deliverability of schemes before they go into procurement, and therefore provide reassurance to local authorities that PFI is the right value for money approach, or indicate whether alternative options should be pursued; and
• a procedure to review the progress of local authority projects so that a pipeline of deliverable deals is established and maintained, and so that lessons learnt from preceding projects are used to inform the development of new projects.