Variations to the contract

48 To allow for future flexibility, as circumstances and needs change, the potential to negotiate variations to a PFI contract is essential (and indeed to traditional contracts). There were many unanticipated small variations across the early wave school schemes, rather than a few large ones. This partly happened because providers wanted to accommodate some of the schools' more detailed requirements as far as design and financial constraints and risk transfer permitted. But the main reason was the availability of extra funds, arising from a separate DfES initiative to devolve capital directly to schools, which came into force during early PFI negotiations. The extra funding led to many small variations as schools sought to use their additional resources to best effect. All parties quickly recognised that the standard contractual clauses covering variations did not allow for a streamlined, cost-efficient and rapid processing of high-volume, small-value transactions, but had been geared to less frequent, more major changes. Recent revisions to the guidance on Standardisation of PFI Contracts should now facilitate improvements.