2.29 The policy to incorporate 50/50 sharing of refinancing benefits in new contracts is now being widely adopted. However, to ensure that these arrangements are used effectively, authorities will need to gain an understanding of the OGC's new guidance and to apply it in practice. In particular, they will need to understand what constitutes, in the OGC's guidance, a refinancing for the purposes of gain sharing; how to be aware when such refinancings are taking place; and to know how to compute the gains that are to be shared. To assist this last point, the OGC has provided further information on how refinancing gains will be calculated in an application note published in July 2002 to accompany its new guidance.
2.30 These are complex issues. The fact that a number of project teams responding to our survey in early summer 2002 did not recognise situations that may have generated refinancing gains (paragraphs 1.34-1.40) underlines the need for the new guidance to be fully absorbed. We therefore consider that training on refinancing issues will help departments to absorb these complex issues and additional information for departments on specific technical issues may also be helpful. The OGC agrees that further sharing of experience with the public sector is necessary and is considering how this might best be achieved drawing on the expertise on refinancing that exists within PUK and the National Audit Office. The OGC has agreed that there should be seminars for departments to raise awareness of key financing issues.
2.31 The OGC stresses that the expertise on refinancing that exists within PUK must be used by departments and that this message will be repeated regularly. The private sector too considers it important that authorities dealing with refinancing matters should always gain input from central government staff with expertise on refinancing. The OGC considers that PUK's Helpline, augmented to deal with the revised general guidance on contract terms, and the PUK Taskforce on refinancing, should help to address this. The OGC also believes that the public sector's ability to handle refinancing will be improved by: the greatly increased emphasis upon departments and advisers following best practice guidance (including that on PFI); other mechanisms, including the OGC's Gateway12 and Project Review Group13 processes; the OGC's Successful Delivery Skills training approach (which will cover PFI); and its new PFI knowledge network which will also help to spread information about best practice on refinancing throughout the public sector. Bringing available knowledge to departments' attention is important as evidence from our survey suggested that information that could help project teams had not been widely read. Only 22 per cent of project teams had read the PAC report on the Fazakerley prison refinancing and only 33 per cent had read the NAO report on this subject. This is disappointing, especially since the OGC told us it drew these reports to the attention of departments.
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12 The OGC's programme for reviewing projects at key stages in their development and also post-contract.
13 The OGC's review group for overseeing local authority PFI projects.