Capacity and skills

3.11  The Department has a very lean resourcing model. Figure 11 shows the level of resources against those of the Waste Infrastructure Delivery Programme run by the Department for Environment, Food and Rural Affairs.12 For a complex sector like housing, the lean resourcing model used, whilst potentially efficient, poses risks to effective delivery.

3.12  Expertise and knowledge of PFI housing sits with three key individuals who have a management role in delivering the programme, one within the Department and two within the Agency. These individuals are supported by a small number of delivery managers who were all newly appointed on the establishment of the Agency, as staff who had previously been in these roles did not wish to transfer from the Department. The Agency was initially unable to fill the post of programme manager as no suitable candidates were forthcoming. It has subsequently reviewed its team structure and recruited an experienced member of staff who will be able to provide support to those managing the team.

3.13  At the time of our audit, local authorities, advisers and private sector providers felt strongly that the Department and the Agency were under-resourced and said that a lack of cover arrangements led to delays if staff were unavailable. The Agency is now well placed to be able to move staff to urgent work when needed and told us that it has adequate cover arrangements in place. Staffing in the Department is much tighter and it needs to ensure it has plans if staff become unavailable at key decision-making points. We found that the Department's progress against its own PFI improvement plan has been slow. A new set of guidance to local authorities, the Housing PFI Procurement Pack, was only approved in Autumn 2009, though progressively made available in draft form to local authorities from the announcement of successful round six bids.

3.14  PFI projects are complex, commercial deals and there is varying expertise amongst the staff responsible for delivering the programme. Those with management responsibilities for the PFI programme were rated highly by stakeholders on account of their significant experience in PFI housing and their strong technical skills. The Department and the Agency need to ensure succession planning and contingency arrangements are adequate and in place given their lean resourcing model. For the majority of the time that the PFI programme has been running the Department has had limited commercial expertise at the most senior levels; an issue that was raised by the Office of Government Commerce in 2007.13 The Department has responded to this by ensuring there is commercial housing and PFI experience at a senior level. The Agency has also recruited senior commercial staff.

3.15  The Agency has found it difficult to recruit staff at a more junior level with PFI experience, though have not found this surprising given the limited pool of experienced individuals in the marketplace. At the time of joining the Agency in December 2008, staff were generally non-expert, though with appropriate sectoral backgrounds, and expected to develop detailed technical and financial knowledge of PFI on the job. Training has continued allowing for peaks in the workload, for instance, the assessment of round six bids.

3.16  Local authorities require a sufficient number of staff with strong commercial skills to run PFI procurement effectively. Some local authorities have very experienced staff but others have struggled to find the level of skilled resource needed. Our case studies highlighted a number of ways in which local capacity can be enhanced (Figure 12).

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12  See our report Department for Environment, Food and Rural Affairs: Managing the PFI waste programme, National Audit Office report, HC 66 2008-09, 14 January 2009. 
13  Procurement Capability Review Programme: Communities and Local Government, December 2007.