APPENDIX FOUR The potential benefit of a LEP

Potential Benefit	Is this a potential additional benefit over:		National Audit Office comment
Procurement efficiencies	Repeat PFI deals?	Framework contracts
■ one competitive tender for 10 years of procurement ■ different types of contracts procured at once (ICT, design and build, facilities management and PFI contracts) ■ guaranteed minimum construction efficiency savings built into long term contract			LEPs are likely to be cheaper than the repeat procurement of PFI deals, but more expensive than framework contracts. Initial costs have been higher than they need to be, making this benefit harder to achieve.
Partnering
Long term partnership promotes better working practices including:			Long-term contractual relationship promotes better working practices.
■ working together to overcome problems ■ transparency in project appraisal ■ established joint working processes and mature understanding of each other's requirements ■ driving down administration costs and encouraging better outcomes			most Local Authorities and their private sector partner are committed to achieving partnering efficiencies, but few have put in sufficient effort to achieve them.
Strong permanent business
■ ability for LEP to act strategically within Local Authority, linking BSF to other programmes e.g. co-located services ■ ability for LEP to win other work, increasing project flow, economies of scale and further procurement efficiencies ■ mechanism to integrate local projects to national programme through BSFI holding (see part 4), increasing project learning			A few Local Authorities have put additional work through their LEP, creating additional procurement savings, but most are waiting for the LEP to prove itself through the delivery of schools. LEPs do not currently have sufficient resources to be called strong permanent businesses, making it hard for them to commit effort to being more strategic.
Development resource
■ incentive for LEP to develop future projects more cheaply and quicker, because supply chain resources are at risk ■ brings supply chain into design and scoping phase early to identify potential efficiency or effectiveness improvements			It is too early to say whether this will decrease costs and improve quality, but effort is being put in to achieve this.
Integrated supply chain
■ bringing Facilities Management, ICT and Design and Build contractors together to scope projects and integrate service provision into designs should decrease whole life costs and improve the performance of buildings			It is too early to say whether this will decrease costs and improve quality, but effort is being put in to achieve this.
Stronger educational and community links
■ increased incentives and processes for the private sector partner to contribute to wider social and educational aims of the programme			The contribution to wider educational aims is used by the Local Authority to assess the performance of the LEP. Such contributions includes, for example, providing apprenticeships and mentoring of local pupils.