2.39 The provisions of the refinancing code say that:
■ an authority will not be obliged to accept increased termination liabilities as part of any refinancing, except to the extent that the contract already provides. But, where the contract does provide for the possibility of increased termination liabilities following a refinancing, it is an overriding condition of the code that an authority should only consent to a refinancing if the outcome for the authority will be value for money; and
■ if an authority does agree to increase termination liabilities to facilitate a refinancing it should do so without seeking or obtaining any higher share of any refinancing gain. This provision of the code recognised that, whilst ideally authorities should receive their 30 per cent share of refinancing gains from applying the code without increasing their termination liabilities, there may be some situations where increased termination liabilities may be necessary to allow a refinancing to be effected which will improve the value for money of the project for the authority.
2.40 The Trust's approach was within those terms of the code in that:
■ the Trust was contractually obliged to allow termination liabilities to increase by amounts which could be as much as £46.6 million following the refinancing;
■ the Trust did not seek any additional share of the refinancing gain for agreeing to the possibility of these increased termination liabilities; and
■ the Trust's analysis of the increased termination liabilities compared to its share of the refinancing gain has given it satisfaction that the refinancing on these terms represented value for money (further details of this analysis are set out at paragraphs 2.43-2.45 below).