PF2 will offer improved value for money for the public sector and the taxpayer. The measures taken to achieve this include:
• public equity co-investment in future projects to ensure better alignment of objectives, greater transparency and improved value for money;
• accelerated delivery ensuring procurement is faster and cheaper than in the past, with improved public sector procurement capability;
• more flexible service provision, together with a gain share mechanism for any surplus lifecycle funds;
• significantly increasing the level of capital grant that authorities can make to projects, without disrupting the transfer of risk to the private sector; and
• encouraging the assessment and use of a greater range of debt financing sources to secure affordable, value for money long-term debt finance.
These improvements, taken together, will deliver substantially improved value for money. In addition, real progress has been achieved with the Operational PFI Savings Programme, where contracting authorities have reported over £1.5 billion of committed efficiencies and savings with a further £1 billion in discussion.
Recognising the wide range of contracting options which are now available to procuring authorities, and to ensure that all reasonable, viable contracting options are considered as part of the appraisal process, the Government will update the existing Value for Money Assessment to reflect these alternatives. The updated and extended guidance will be published for consultation in spring 2013.