3.11 Some 70 per cent of contractors told us that they had at least fair scope to innovate in the contract (Figure 27). Some, however, said that their scope to innovate was constrained. For example, road contractors told us that road schemes were constrained by orders and commitments made at public enquiries and that, in their opinion, at the tender stage innovation is restricted by the desire to have all bidders competing on exactly the same terms. Hospital and prison contractors noted the building regulations they are required to follow. And, in the major accommodation project, PRIME, the contractor thought that the use of measurement techniques based on the method of service delivery, rather than the quality of service delivery, inhibited innovation and the contractor's ability to drive service improvement.
3.12 Most contractors considered that the scope to innovate in practice was in line with their initial expectations based on the contractual specification. Some who expected little scope for innovation found that there was actually more (3 per cent of the total surveyed). Some contractors, however, particularly those with high initial expectations of the scope for innovation, considered in practice they had less scope than they had originally expected (6 per cent of the total surveyed).
3.13 Although some 70 per cent of contractors considered that the contract gave them at least fair scope to provide innovative solutions, authorities considered that only around a third of contractors were wholly demonstrating innovation (Figure 28). Most authorities considered contractors were being partially innovative but a significant minority thought there had been no innovation from the contractor. Around 20 per cent of authorities thought there had been no innovation from the contractor during the procurement and the subsequent period when the service was being introduced (the design and build stage). Some 30 per cent of authorities said that there was no innovation from the contractor once the service was in operation.
3.14 The results of our survey, and comments made to us by contractors, suggest there may be scope for more innovation in PFI projects. Contractors' scope for innovation should only be constrained where the public sector has requirements for the form of service delivery which cannot be varied or where there is the need to conform with government regulations. To constrain innovation in other respects may preclude opportunities for improved value for money.