17 As a result of this examination we make the following recommendations:
a) The OGC's central approach to negotiating a 30 per cent share of the refinancing gains on early PFI deals is one of several examples where a collective approach by the OGC to negotiations with the private sector has been beneficial. There may be other areas of the public sector where it may be appropriate to consider whether benefits would arise from the negotiating strength of government as a single body.
b) The OGC should take steps to ensure departments are fully aware of the issues covered in the new OGC guidance. Refinancing issues are complex and our work has shown that departments may not always recognise situations that give rise to refinancing gains. Departments need to : better understand the situations that could give rise to refinancing benefits; to be able to compute correctly their share of refinancing gains; and to manage the risks attached to making the new arrangements work effectively. As well as carrying out its plan to encourage departments to follow the new OGC guidance and to consult PUK on refinancing matters, the OGC has agreed that this issue should also be addressed as part of the new Successful Delivery Skills training programme for the public sector. It also proposes to arrange seminars for departments to improve their awareness of the issues involved and to share experience.
c) Where a complex area of new central policy is to be introduced, initial feasibility work should be undertaken to establish a realistic timetable for the implementation of the policy. If this indicates that a long period will be needed to develop the new central policy, or the guidance that departments will need to implement the policy, the Treasury and OGC should consider carefully whether departments should be given interim guidance. It may be helpful to outline the issues that departments will need to keep in mind pending the finalisation of the new policy and how it will be implemented.
d) Departments should gather sufficient information to assess whether their refinancing arrangements are increasing value for money to the taxpayer. This needs to take account of any effect refinancing gain sharing arrangements may have on the pricing of contracts and on incentives to contractors to perform throughout the contract period. The OGC should gather feedback from departments on these matters to enable it to assess the effectiveness of the new approach to refinancing that has been adopted across government.
e) Departments should obtain from their contractors sufficient information about their financing to ensure that they are aware of all refinancings for which the benefits should be shared. This information should be sufficient to enable departments to be aware of any significant changes to a project's financing structure and to understand whether or not such changes will create refinancing benefits.
f) Given the complexities and specialist nature of refinancings, departments should seek advice on refinancing matters from suitably experienced advisers including OGC and PUK as appropriate. Advice should be taken, initially, when reviewing bids and financing proposals to identify the scope for refinancing and should always be sought when faced with any refinancing situation (including situations that may have been described as a "financial restructuring").