7.31 In recognition of these disproportionate costs at the lower end of the scale, the average capital value of PFI schemes has risen in recent years, partly thanks to a trend towards bundling small projects together (new initiatives in this area are discussed in Chapter 8). For example, the average capital value of PFI schemes sponsored by Local Authorities has risen steadily in recent years and stood at £37 million in 2002. Further action to improve general procurement skills and drive through standardised contracts across the public sector, detailed in Chapter 8 can also improve the value for money achieved in PFI. However, there are strong grounds for a new approach which builds on the trend toward larger capital value projects and helps ensure decisions between procurement options are always made on a value for money basis by:
• reforming the process of PFI procurement to include consideration of the transaction costs associated with PFI at an early stage in the process, and identifying alternative procurement options where those costs mean a project does not offer overall value for money, as outlined above; and
• making a general presumption against PFI being used for small schemes, below a level on which the Government will consult (see paragraph 7.34 below).