1.19 Availability of the services specified to the required standards is necessary if a PFI contractor is to receive full payment of the unitary charge. The payment mechanism puts into financial effect the allocation of risk and responsibility between the authority and contractor. It determines the payments the authority will make to the contractor and the incentives for the contractor to deliver the service required. It is established best practice, as recognised in Treasury guidance on standard contract terms2, that PFI contracts should clearly set out required service standards, the performance measurement system and associated performance deduction system, and performance review processes. The performance measurement system and
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| Examples of contractors' thoughts on performance criteria and performance review processes | ||
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| Bay Community National Health Service Trust They work very well 'It is a vigorous system which highlights problems and precludes continued non- conformity with the agreed standards identified in the concession agreement.' | National Savings They work very well 'National Savings and Siemens teams work very closely together on a daily basis. Process includes "lessons learnt" as standard practice, and work is focussing on improving service. Breaches are reviewed fully in joint sessions.' | South Manchester University Hospital National Health Service Trust They are satisfactory 'Some of the payment calculation formulae in the contract are complex and unwieldy. However, despite these problems, effective joint working and a good relationship help to apply the principles of the processes satisfactorily.' |
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| Source: National Audit Office survey of contractors | ||
associated performance deduction system should not be too complex as this can lead to disputes. The performance measurement system should consist of output measures, and, where appropriate and practical, include surveys of the users of the services provided.
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