The Public Private Partnerships Programme, a governmental agency,formed by the Local Government Associations in England and Wales, advising local authorities on developing, procuring and delivering PPPs and PFI projects.
The difference between the PFI credits plus other funds that the LEA has identified, and what the LEA would like to spend.
The scope of the auditors' work at a local authority is determined by the Code of Audit Practice and is to review and report on:
• the financial aspects of the corporate governance arrangements;
• the financial statements; and
• the arrangements in place in relation to economy, efficiency and effectiveness in the use of resources.
In relation to PFI schemes the auditor:
• has to be aware of proposals at an early stage and comment where appropriate to the authority on the arrangements for managing the scheme and accounting for the transactions. Auditors' then have to 'stay alongside' the scheme as it progresses in order to meet their Code responsibilities;
• may provide the authority with views on the proposed accounting treatment in terms of whether the scheme should or should not be included as an asset on the balance sheet. When PFI transactions appear in the accounts the auditor will then give an opinion whether these have been compiled in accordance with the relevant accounting standards;
• does not act as a PFI consultant, financial or legal adviser to the authority. The authority is responsible for obtaining advice through the various stages of the PFI process and about different financial and legal aspects of a particular scheme. It is the authority's decision whether or not to enter into a PFI contract and this is not dependent upon a 'seal of approval' from the auditor for any particular aspect of the scheme.
An element of the monthly payment to a PFI provider for making the building available. The full fee is only paid when all parts of the building are available to specified standards as contractually required.
Building Research Establishment; the firm that carried out technical assessments of buildings quality on our behalf.
Commission for Architecture and the Built Environment: cabe is an executive non-departmental public body that was set up to champion high standards in the design of buildings and the spaces between them.
Compulsory competitive tendering.
The Chartered Institution of Building Services Engineers.
Construction Industry Council; the body that developed the user questionnaire on which the MORI survey was based.
The dominant form of PFI in which the service provider is responsible for the design, build (financing) and operation of an asset such as a school or hospital. Operation refers to the provision of some or all of the 'facilities management' services related to the asset's use - such as cleaning and maintenance.
Department for Education and Skills, whose PFI-related responsibilities include approving PFI business cases, allocating PFI credits and determining overall design standards for schools.
The generic term 'facilities management' is used in a PFI sense to cover all the day-to-day aspects of managing buildings, their systems, equipment and furniture:
- hard FM covers the costs and responsibilities of maintaining the buildings themselves.
- soft FM relates to the costs of ancillary building services such as cleaning and grounds maintenance.
A best practice guide to the HM Treasury's policy for economic appraisals and evaluations for all central departments, executive agencies and devolved administrations.
Local authority.
Local education authority.
Lifecycle(or whole-life approach)
Consideration of issues such as the need for, and funding of, buildings maintenance over the period of the contract's life (typically, in PFI schools, 25 to 30 years).
Market & Opinion Research International; the firm that conducted user surveys on our behalf.
National Audit Office.
The Office of Government Commerce - a part of the Treasury set up to lead a programme to modernise procurement in government and deliver value-for-money improvements.
The unitary charge (payment) is based on performance as well as availability criteria. Service standards as defined in the output specification are translated into performance measures that are linked to performance points and financial deductions if they are not achieved.
Private finance initiative.
See PFI provider.
Revenue support for local authority PFI schemes is provided via PFI credits. PFI credits are paid to LAs through the Standard Spending Assessment (SSA) system in a similar way to traditionally procured capital projects.
The private sector body that is bound to deliver the buildings and services over the contract period. It is often a consortium of different private interests (including, for example, finance, construction and FM). The PFI provider might be known as any of the following: Project Company, Consortium, Special Purpose Vehicle, Concessionaire, Contractor, Service Provider.
Public private partnership. A generic term for projects involving both the public and private sectors (with varying levels of involvement and responsibility). PFI is one variant of a PPP.
The Public Sector Comparator. A financial benchmark for assessing the value for money of PFI services and buildings compared with the costs of building them via traditional finance.
Special purpose vehicle - a company created and owned by the consortium of private sector interests involved in a PFI deal, established to provide the legal and commercial focus for the relationship between the PFI provider and the local authority.
Standard spending assessment; the method used centrally to allocate funds to a local authority.
Standardisation of PFI contracts guidance
Developed and revised in 2002 by Partnerships UK and OGC as guidance on PFI contract terms and conditions.
Traditional (or conventional) funding
Ways in which the money for new or refurbished schools was secured by LEAs before the PFI scheme (for example, by borrowing on its own account). Such projects are generally paid for in full shortly after construction is completed.
The Transfer of Undertakings (Protection of Employment) Regulations 1981, which aim to safeguard the rights of employees on their transfer to another employer, for example when their work is contracted out.
The (usually) monthly charge paid by the public sector client to the project company, once the contract is running, over the concession period in respect of the provision of services provided by the PFI provider.
The direct users of buildings and services - in schools this includes pupils, teachers, governors, support staff and the local community.
Where either the provider or the LA wish to make a change to the contractually agreed specification for buildings or services, a formal variation has to be agreed by all the relevant parties and there is a contractually agreed set of procedures that have to be followed. This may well feed through to an adjustment to the unitary payment and, in some instances, the service performance and availability criteria.
Value for money.
Source: Audit Commission, incorporating material from publications and websites of 4ps, Audit Scotland, CIPFA, NAO, IPPR and Unison.