7.20 Governments have always been clear that PFI should only be used where it is value for money. Assessing the value for money of contracting approaches is a relative concept, requiring a comparison of the options and their expected outcomes to be identified, defined, estimated, and compared to alternatives.
7.21 Value for money is assessed at various stages throughout the life of a project. In the early stages of a project appraisal there will be a high degree of estimation as to the likely cost and performance outturn of alternative delivery options. The use of historic evidence is important, drawing on outcomes and outturn data from similar projects, but inevitably assessing the relative value for money of alternative delivery options requires a considerable degree of judgement, particularly at the early stages of the appraisal process.
7.22 There are a variety of contracting options which adopt different approaches, relative to PF2, to the allocation of design, construction, financing, asset maintenance and operational responsibilities between the public and private sector. These include prime contracting, design and build, institutional leases, joint ventures, strategic partnerships, concessions and alliancing among others. In addition, the Government is keen to encourage new approaches such as employee-led mutuals, and social or charitable led enterprises, as part of its plans for modernising public services. This will add to the existing delivery options available, but also add further complexity to project appraisal and consideration of alternatives. The Government's overriding objective is to secure value for money.