2.21 In our survey:
■ no authority reported that the relationship with their contractor had deteriorated following a refinancing;
■ most authorities indicated that their relationship had remained the same; and
■ a small number of authorities commented that their relationship had improved.
2.22 Those authorities which noted that there had been an improvement in the relationship with their contractor commented that there was a greater degree of mutual trust and an increased sense of partnership following the refinancing. The process of refinancing, which tends to necessitate a great deal of interaction between project teams, can therefore re-establish and develop relationships.
2.23 Some authorities reported that refinancing had provided an opportunity to resolve contractual issues which had been in dispute. For example, a characteristic of some early performance management systems has been the inappropriate use of subjectivity in defining performance indicators.24 This has caused problems in assessing the performance of facilities management services and imposing, where necessary, financial deductions for poor performance. A refinancing can enable such contractual problems to be resolved but they should be negotiated separately from the refinancing and should not be viewed as reasons for entering into refinancing negotiations.
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24 See NAO Report Darent Valley Hospital: The PFI Contract in Action HC 209 February 2005 paragraph 1.33.