There is continuing evidence that procuring authorities are allocating insufficient resources to adequately prepare and develop their projects and test their requirements before formal engagement with the market. This lack of preparation and advice, particularly on design issues, has resulted in sub-standard projects getting the go-ahead with clients clearly unsure of what they can expect to be delivered on their behalf.
The Paddington Health Campus Independent Review Panel report noted the good intentions behind the campus project team's recognition that more detailed design earlier in the project could reduce uncertainty for a PFI partner. The report states that once the design for the campus was dependent on a significantly taller building, detailed design rather than outline design was necessary for planning approval-but given that to have done this would have been counter-PFI practice, a master planning approach was instead adopted to show compliance with planning requirements. The Panel recognised that while the intention was to lessen the uncertainty for a PFI partner, this would have needed recognition as a valid risk management surrogate by the PFI industry.
We are pleased that HM Treasury is now working to adapt PFI policy in order to allow better preparation through design to take place earlier in the PFI process. We hope that PFI guidance will be changed accordingly and that clients will be given the early resources needed to enable more up-front design work to take place.
Allowing clients to work with architects to a greater degree before appointing the consortia would:
- Place greater focus on improving the resourcing of the vital early design stages;
- Enable the user-client, with responsibility for the strategic delivery of core services, to retain control of the strategic planning, concept design and quality issues leading to better design quality solutions;
- Allow the public sector client to have a proper understanding of cost and affordability issues prior to engaging with the private sector;
- Provide the private sector with the confidence to take full responsibility for the funding, detailed design, construction, maintenance and availability of the facility.
The change in the scheduling of the detailed conceptual design work is significant. It will take place at the very earliest stages of the procurement process and require close client involvement, before identifying the construction team-an innovation the RIBA has long proposed. Speaking to Contract Journal in early March3, Richard Abadie (Head of PFI, HM Treasury) indicated that he supported the principle that privately financed schemes must go to the market with greater specification in order to drive down costs:
"The message is that authorities should do some degree of design work upfront themselves, rather than leaving it to the private sector. This is what we will be saying in our policy message and in our presentations in future."
In effect, the changes will allow clients to enter the market with a much clearer, well-tested and accurately costed idea of what they will receive through the construction phase. They will themselves be better briefed on what can be achieved, and the benefits or costs of the decisions they take in conjunction with the conceptual design team. The level of risk for contractors will be reduced, as they will have a clearer idea of what is required, but still have the latitude to apply their own innovations in delivering the client's specifications or bettering them.
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3 Contract Journal, 8 march 2006.