Before agreeing to a PFI project, departments have to conduct a value for money assessment and carry out both quantitative and qualitative tests. There have been concerns over the standard value for money assessment model used by HM Treasury:

The merits of using private finance should be assessed by considering whether the benefits of using private finance outweigh the additional cost of private finance above government borrowing. 21

The 2013 NAO analysis of the model found that it fell short of its requirements, as the assessment process for PFI projects failed to enable a comparison of private finance to government borrowing. Furthermore, the NAO report states that supporting evidence was lacking within the qualities and quantitative elements of PFI assessment. 22

The model was withdrawn in 2012, with HM Treasury stating that it would soon be updated to incorporate the various other contracting options, such as PF2. To date, this guidance remains unpublished. 23 In the meantime, departments are being urged to follow guidance published within the Green Book - a general HM Treasury publication outlining how to appraise proposals prior to committing funds.

Criticisms have been made of the standard assessment used to decide whether PFI is value for money. It has since been withdrawn but is yet to be updated