4.25 Reviewing service requirements is one of the key areas in which the Operational PFI Savings Programme is identifying savings in existing PFI contracts. This programme has emphasized the important of reviewing the scope and specification of services against the public sector's requirements, taking account of projected future requirements, past usage and performance. The operational reviews undertaken to date have analysed services specifications and considered opportunities for more efficient service provision. This has identified a number of opportunities for achieving operational efficiencies, examples of which are set out in Box 4.F.
Box 4.F: Lessons from operational efficiency reviews Examples of potential savings from reviewing service specifications against requirements identified from early reviews: • Reducing hospital domestic services which had been specified at a higher level than those being applied more generally in the market; • Changing collections of household waste to bring the PFI contract into line with some of the local authority's other collection systems. This change has been facilitated by increasing the frequency of kerbside recycling from four weekly to two weekly; • A local authority review with its PFI service provider identified that investing to save in a central management system and LED lamps for its street lighting would deliver a significant reduction in energy usage, taking advantage of improvements in technology since the contract was signed; and • A review of the inspection regime in transport infrastructure PFI contract identified that it would be possible to reduce the frequency of asset surveys without having a significant effect on the accuracy of the data. |
4.26 Periodic efficiency reviews are, therefore, being introduced into new contracts, to assess whether the project is meeting the public sector's requirements and to recommend any appropriate service and efficiency improvements. The efficiency reviews will be undertaken every two to three years, and should align with the five yearly review of actual and planned lifecycle expenditure where appropriate to minimise costs.
4.27 The contractor will be responsible for ensuring that these efficiency reviews are undertaken, and as such will pay the private sector costs incurred. Any savings made will be shared between the authority and the contractor, with 75 per cent of savings going to the authority and 25 per cent to the contractor. It is important to note that these efficiency reviews should not preclude the contractor or the authority proposing efficiency measures at other times during the lifetime of the contract and should not substitute for other standard performance reporting mechanisms.