PART TWO Changes to operational PFI deals are often poor value for money

Although the quality of work when changes are implemented is usually considered by the public sector to be satisfactory, making the changes and processing them is often costly and can take longer than expected.

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Very few changes have been withdrawn or cancelled
The quality of changes made has met expectations
Larger changes are not always subject to a competitive process, putting value for money at risk
Where competitive tendering does take place for larger changes it may not always result in the best value for money
Minor changes we reviewed were often expensive, compared with industry benchmarks
Base costs for comparable jobs vary widely across PFI projects
As an example of small PFI works, the base costs of additional electrical sockets we reviewed were higher than benchmark prices
Several methods are used to check the cost of small changes
Additional fees and ongoing costs are often added to base costs but are not always justifiable
There are inconsistencies in the treatment of lifecycle and maintenance costs and value for money is uncertain
Management fees charged by SPVs vary widely, are mostly unjustified and cost the public sector approximately £6 million a year
Larger changes have been implemented in line with conventionally outsourced work of a similar size
Small changes take longer to process under PFI than in conventionally managed accommodation, but there have been no delays to urgent changes