3.6 At a Programme Level, the VfM assessment should include both a qualitative assessment and a quantitative assessment. This will most usefully be undertaken in advance of Spending Reviews, in order to help inform budget allocation decisions.
3.7 Generally this stage will be completed by the Scottish Government as part of its role in planning for, and assessing, infrastructure investment and appropriate delivery routes. This will entail investment programmes and projects being assessed in terms of considering the most appropriate procurement route to deliver Scottish Government policy objectives. For those identified as potentially suitable for private finance and therefore a move away from conventional procurement, this application note applies. For other procurement routes, applicable guidance from the SG Construction Procurement Manual should be applied. The SG Construction Procurement Manual details various procurement routes that could be considered, including NPD and DBFM. An overview of the characteristics which could make a project suitable for private finance is provided at Appendix A of this guidance.
Stage 1: The Qualitative Assessment |
3.8 The Qualitative Assessment considers the Viability, Desirability and Achievability of NPD compared with traditional procurement. It is likely that this assessment is best undertaken in a workshop environment involving stakeholders and, where necessary, advisors.
3.9 The underlying considerations regarding viability are:
Viability Objectives and Outputs - Can service requirements be stated in clear objective output based terms? - Can the effectiveness of service delivery be measured and monitored?
Operational Flexibility - Can operational flexibility be maintained over the lifetime of the contract? - What is the appropriate contract length for projects in the programme?
Equity and Accountability - Are there public equity reasons for providing the service directly? - Are there accountability reasons for providing the service directly?
Regulation and Legislation - Are there any regulatory reasons for providing the service directly? - Are there any legal reasons for providing the service directly? |
3.10 The above considerations focus on whether:
• there are issues that require that the services be provided by the public sector directly; and,
• the service be captured in an output specification and contract based approach.
3.11 When assessing viability, the public sector must ensure that that the appropriate Accountable Officer is satisfied that operable contracts, with built in flexibility, can be constructed and that any strategic and regulatory issues that impact on the public sector can be overcome.