7. The MOD should be receptive to refinancing proposals because there is potential for both investors and the Department to share benefits. However, before consent is given it is important that the Department closely scrutinises any proposal to ensure that it represents value for money in its broadest sense. That is, any gain should more than compensate for increased risk taken by the Department. It should also ensure that any restructuring does not reduce the incentives on the Contractor to perform, especially in later years and that it does not undermine the financial stability of the SPV and thereby endanger the provision of services.
8. Should any of these concerns be raised the Department may refuse to consent to a refinancing, despite the Contractor offering to share the gain. The reasons for this refusal should be provided in a timely and transparent manner.