Stage 1 - Investment Programme Level Assessment
(Section 4 of Guidance)

Requirement

Details Assessed

Action
Undertaken /
Comments /
Action
Required

1. Confirm that the case for privately financed procurement on a programme basis has been tested

1. Confirmation that elements detailed in Appendix A have been reviewed & the pro-forma completed.

2. Confirm that the typical capital value of individual projects will be of sufficient size for NPD or other forms of private finance / investment

2. Undertake Qualitative Assessment of private finance / NPD versus traditional procurement on a Programme basis

1. Viability of programme (complete table below)

2. Desirability of programme (complete table below)

3. Achievability of programme (complete table below)

4. Consider wider VfM factors and Generic VfM factors relevant to the Programme.

If there is a mixed economy of procurement methods (i.e. additional to NPD / private finance), 1 to 4 above should be adjusted to cover all procurement types.

A separate workshop output report should be provided to support the completed pro-forma tables on viability, desirability and achievability and summarise the wider VfM factors of the programme.

3. Quantitative Assessment - review costs of establishing and operating the programme relative to efficiencies and economies derived and financial / non financial benefits

Also if applicable test a typical project in the programme for quantitative VfM

To test a typical project in the programme:

1. Relevant costs assessed (capital, lifecycle, revenue). Supporting assumptions to be provided.

2. Risks, Optimism Bias and transaction costs assessed. Supporting assumptions provided.

3. Past projects used as historical evidence of pricing of relevant costs and risks.

Deliverables:

• Report compiled by the public sector with input from advisers as appropriate.

• Where applicable CPAM and shadow bid models available for review. All input assumptions verified.

• Review of economies of scale, efficiencies and transaction costs of the programme vs benefits (financial and non financial)

4. Combined Overall Evaluation

1. Quantitative and Qualitative programme outputs are considered together

2. Implication / Suitability of being able to switch procurement routes and impact on programme funding to be considered

3. Evidence of VfM of previous private finance / NPD projects considered in selecting a core procurement route for the programme

4. Are suitably resourced and structured delivery teams (including budgets) in place (local and central if applicable) or can be put in place.

5. Overall programme timescales considered (including different delivery dates relative to each procurement method)

6. Detail any gaps in programme information and outputs and assess their significance and provide plan to address

7. Conclusion on suitability of programme for private finance / NPD procurement

The final report should cover the above points with supporting evidence.

5. Review of Affordability

Affordability implications assessed through:

1. PayBack Period analysis

2. Programme set up cots and operational costs relevant to budgets. Internal affordability forecasts and budgets should be assessed

For a typical project:

3. the shadow bid model/CPAM with sensitivity analysis.

4. Consideration of budget/funding sources and grant funding (eg. Prudential funding etc) and revenue vs. capital spend implications

5. Consider whether investment plans are in accord with Spending Reviews / Infrastructure Plan

6. Consideration of ability to switch some projects from private finance / NPD to traditional procurement and the affordability implications of this.

The final report should cover the above points with supporting evidence.

6. Review of Balance Sheets Status

Indicate the likely Accounting Treatment implications of projects procured in the Programme and detail in final report.