1. HMT reiterated its policy on PFI in its publication Infrastructure procurement: delivering long term value1. This confirms that the Government has no preference between conventional procurement, PFI or any of the other public private partnership (PPP) procurement approaches outlined in the document. Its policy remains that PFI should be used for value for money reasons, regardless of accounting treatment, but not at the expense of staff terms and conditions.
2. Since its introduction, PFI has evolved and a standard approach to risk allocation between the public and private sectors has been established. PFI contracts must be drawn up in accordance with HMT's Standardisation of PFI Contracts (SoPC) which includes mandatory principles and drafting for certain key contractual clauses. Deviation from this standard is acceptable only if HMT agreement to the particular derogation has been obtained.
3. In response to HMT's recommendation that it "would encourage procuring bodies to develop SoPC compliant sector specific contracts" the MOD PFU prepared a standard form of MOD PFI contract - MOD PFI PA, first issued in August 2006 - which is mandated for all MOD PFI deals in procurement at that time and all subsequent PFI deals. Further detail on this topic is provided under the heading "Standardised Contract" in Section 3.
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1 Published on HMTs website and dated March 2008