27 We have assessed how the Treasury managed the risks to value for money, rather than examining individual projects. Departments' ability to finance the existing programme was in doubt until the Treasury set up The Infrastructure Finance Unit and reactivated the lending market. Our value for money conclusion relates to projects actually financed in 2009. However, we accompany that conclusion with a warning on value for money for subsequent projects.
28 On projects financed in 2009: It is our opinion that in the circumstances the extra finance costs of projects financed during 2009 were value for money. We take this view because the overarching policy priority to provide economic stimulus severely limited the scope for the Treasury to do more than they did to protect public value while ensuring that the programme of PFI projects was moved forward. In reaching this view we considered the fact that the financing margin being paid had widened significantly, and that banks renegotiated lending terms which resulted in an increased cost of risk for the public sector. We regard this as having been offset to some extent, and as far as was reasonably achievable in all the circumstances, by the increased refinancing gain share terms obtained by the Treasury.
29 We also considered whether the PFI deals could have been required to submit individual revised business cases, which might have led to some of the least advantageous projects being postponed or discontinued with the effect of improving overall value for money. We concluded that this requirement would have imposed further delay that might have put the policy objectives at risk, and would not therefore be a reasonable yardstick to assess the protection of value for money in the programme. However, having concluded thus positively on projects financed at the height of the crisis, we would expect more exacting criteria to be applied subsequently.
30 On projects which have yet to be fully developed: There should be no presumption, based on earlier business case analysis, that continuing the use of private finance at current rates will be value for money. We now expect a thorough project by project review of the forward programme to apply more exacting and narrower criteria than applied to projects financed at the height of the crisis. PFI is less likely to be value for money unless there are substantial and credible savings to offset higher financing costs. The Treasury's formation of Infrastructure UK gives a platform for wider consideration of risks, other funding options and alternative procurement models.