SFT has reviewed a selection of contracts from the majority of the 22 public bodies from whom we have received documents to date. A number of savings proposals have been considered and rejected as either impractical for classification / budgeting reasons or uneconomic and these are described above.
What is clear is that the opportunity for significant financial re-engineering is limited. The combined effect of: interest rate swaps; contractual terms; PWLB cost increase; and government accounting rules provides limited room for manoeuvre. While there have been some proposals from the private sector to restructure debt the initial review of these shows that they do not offer value for money.
There are a number of opportunities to make savings - on a widespread basis this is primarily through improved contract management, which we believe could realise at least £5.5m per annum.
SFT will proceed with some pilot projects to test the value for money of taking back insurance risk and capex change in law risk.
SFT will assist public sector bodies with any moves towards a shared services model of contract management, including both training of staff and advice in the implementation of the areas of savings and benefits highlighted above where appropriate.
Projects that closed at financial crisis margins in 2008 may start to be refinanced in 2011 and SFT will monitor and support these transactions to ensure maximum value for the public sector.
SFT will work directly with the relevant local authorities regarding the implementation of savings opportunities identified from the early NPD projects.