7.6 The Government proposes, in reforming the value for money appraisal process, to establish an investment programme assessment of the appropriate procurement option for those areas where PFI may offer best value for money. In this first stage, Departments will make both an assessment of the best choice of procurement route, and the appropriateness of PFI for these particular sectors. Departments will have to justify their assessment of the appropriate procurement route in the Spending Review context, demonstrating how the benefits of PFI outweigh the known costs, on the basis of:
• the Government's approach to where PFI investment can be appropriately used as laid out in Chapter 3, taking into account equity, efficiency and accountability;
• the general characteristics apparent from the evidence so far which seem necessary for PFI to be successfully applied as summarised in Box 7.1, including the ability to specify requirements in the long term, and effectively allocate risks; and
• the available evidence on where PFI and conventional procurement have proven successful at providing overall value for money in the past in similar investment projects. This evidence will be made available in new guidance, laying out what the objective benefits and costs of each procurement option are, benchmarked against the relative success of other PFI and conventional procurement programmes.
7.7 By making a value for money assessment of all procurement options at an early stage, as investment programmes are being considered, this new initial stage will allow maximum flexibility in the choice of procurement options in these areas. This early value for money assessment will be used, for example, to evaluate some potential new areas where PFI may be applicable, outlined below.