6 The Treasury asked us to review the £1,603 million of signed savings. We assessed the reliability of signed savings by reviewing a sample of 15 savings reported to HM Treasury, which included the six largest signed savings and which in total accounted for £1,372 million (or 86 per cent) of the £1,603 million. We assessed whether reported savings were supported by 'sufficient evidence', 'partial evidence' or had 'insufficient evidence'.
7 We also set out to comment on the Treasury's overall approach to supporting departments and other contracting authorities to identify and report savings on operational PFI contracts, and highlight examples of savings to help stimulate the identification of further savings.
8 We carried out a high level review of key documents rather than a full audit. Our work is not intended to fill any gap in quality assurance by departments, or serve as a substitute for an internal audit service.
9 There are some limitations on the scope of our review. It is important to be clear that:
a. For the most part, the reported savings relate to reduced future payments and therefore are not fully 'realised' when they are reported. Our work enabled us to form a view on the quality of the evidence underpinning the forecast signed savings, but it does not provide assurance that these savings will in fact be realised.
b. Our work was limited to interviewing representatives of procuring authorities and reviewing documentary evidence. Our work is not intended to give assurance about the impact of these savings on front-line services.
c. Some risks that transfer to authorities as a result of these savings may materialise and may increase authorities' costs. We have assured ourselves that authorities have considered the risks associated with these savings and their potential effects, but we have not audited the authorities' governance or management of these risks and their associated costs.
d. We did not examine the impact of departmental reviews of contracts prior to signature, which in some cases have resulted in better value contracts (paragraph 2.7).