1 The National Audit Office examined the funding competition held to finance the Treasury PFI deal to refurbish its office space, the Government Offices Great George Street, known as GOGGS.
2 We used an issue analysis approach to design the scope and nature of the evidence required to complete this examination. That is, we set a series of high level audit questions that we considered it would be necessary to answer in order to assess the success or otherwise of the finance competition, and collected evidence accordingly. For each of the top level questions, we identified a subsidiary group of questions, linked logically to the main questions, in order to direct our detailed work and analysis. Our general report Examining the value for money of deals under the Private Finance Initiative (HC 739, 1998-99) provides an outline of this general methodology which acts as a starting point for all of our PFI examinations.
3 The top level questions we set were:
■ Was the finance competition well managed?
■ Was the finance competition a success in financial terms?
■ Was the competition a success in a wider PFI sense?
4 Our main evidence has been derived from examining documents provided for us by the Treasury, interviews with relevant staff within the Treasury and their advisers and discussions with Exchequer Partnership and their advisers.
5 We also commissioned expert consultants to undertake detailed work on our behalf. Deutsche Bank was employed to provide a market view of how the competition was managed and to assess the value for money impact of the different components that make up the financing. We also requested that Deutsche Bank survey the financial community for us to gather information regarding the impact, acceptance and potential replicability of the funding competition.
6 We also engaged Operis, a firm of financial modelling experts, to examine parts of Exchequer Partnership's financial model. Operis undertook sensitivity analysis to quantify the impact on the contracted Unitary Payment of the bond spread being different to that achieved at the time of the bond launch.
7 Finally, we discussed our findings with key interested parties, including Partnerships UK and the Office of Government Commerce.