2.50 Because of the complexities of refinancing authorities must take advice from parties with experience of refinancing issues. The Trust was advised for the main part by the Department's Private Finance Unit who provided a large amount of support to the Trust during the refinancing negotiations drawing on the Private Finance Unit's knowledge of the PFI hospital portfolio which included other deals where refinancings were being considered. In addition the Department took advice from the Treasury including, but not limited to, the issue of the discount rate to be used for evaluating the amount of the refinancing gains. The new Treasury Refinancing Taskforce (resourced by Partnership UK) formed in late 2002 was not called on for additional advice prior to the completion of this refinancing in March 2003 but were advised on more than one occasion of the progress on the refinancing. The Trust also appointed Eversheds to provide legal advice and Ernst & Young to provide financial advice at a combined cost of £275,000.
2.51 The Trust appointed Ernst & Young as financial advisers in February 2003, as the refinancing was being finalised. The Trust asked Ernst & Young, at this stage in the negotiations, to provide a final review of the terms of the proposed refinancing and to report on these to the Trust Board. Ernst & Young completed this just before the refinancing was finalised in March 2003.
2.52 Ernst & Young's analysis of the refinancing, and its negotiations with THC Dartford on the Trust's behalf, was valuable to the Trust in closing the refinancing which had been proposed by THC Dartford. As the parties were seeking to complete the refinancing within a few weeks of their year-ends of 31 March 2003 the Trust had very limited time to absorb the information on the refinancing which Ernst & Young provided. If the Trust had appointed Ernst & Young earlier the Trust's understanding of the refinancing would have been greater at the time the main aspects of the refinancing terms were being negotiated. With this greater understanding the Trust would have had more time to consider whether alternative strategies to negotiating the refinancing, for example in respect of termination liabilities, could have been pursued.
2.53 The Trust acknowledges that it would have helped its understanding of the issues if it had appointed external financial advisers earlier in the negotiations but it does not consider it suffered financially from the timing of the appointment. At the time the Trust was advised by the NHS Private Finance Unit not to appoint advisers until it was certain that the refinancing would go ahead. In addition, authorities would now be expected to keep informed, and to make greater use of, the Treasury Refinancing Taskforce which has now built up experience of refinancing issues across government.