OGC - QUICKER, AND BETTER PPP PROJECTS HERALDED BY PAUL BOATENG
31/07/2002
Paul Boateng, Chief Secretary to the Treasury, today welcomed the
launch of revised Guidance to all who are negotiating PFI contracts.
This will streamline PFI deals, cutting costs for public and private
sectors alike and speed up delivery of new and improved public
services.
Using the Guidance will strengthen the position of public sector
clients and bring clear benefits to all parties:
- Speedier negotiations and savings on advisers fees
- Consistent pricing of types of contracts and common understanding
of the main risks
Paul Boateng, Chief Secretary to the Treasury commented:
"This improved Guidance will make an important contribution to the
Government's public services modernisation programme. The challenge
now is to implement the Guidance so that we see quicker, better
projects delivering even better value for money for our taxpayers and
improved services for our citizens."
Peter Gershon, Chief Executive Officer of OGC commented that:
" This Guidance is a very important advance in the development of
best practice. I have agreed with the Chief Secretary that OGC and
Partnerships UK will work with departments, local authorities and the
4Ps to ensure that it is implemented rigorously. Only in this way
will we maximize the benefits for the public sector and reduce the
high bid costs faced by private sector partners."
The revised guidelines build on existing standardised guidance first
published in 1999. Using standard terms speeds up the negotiation
process. They allow the private and public sectors to avoid
re-inventing the wheel on each contract and thus to focus on the
bottom line - delivery of improved facilities and services for the
public.
New or improved clauses have been included that cover a number of
aspects of a PFI contract e.g. insurance, planning risk, assignment,
early termination and performance measurement; all technical issues
where standardisation allows a better focus on delivery. Under the
new refinancing terms the public sector secures half the gains.
NOTES TO EDITORS
1. This guidance has been produced following extensive consultation
with the public and private sectors. This was undertaken on behalf of
the Office of Government Commerce by Partnerships UK. Consultation
has been with departments and a wide range of representative groups
from the private sector. OGC welcomed the constructive way in which
all sides have contributed to the exercise.
2. This guidance will work because it is acceptable to all parties.
3. This guidance revises the original Guidance issued in July 1999.
It also builds on guidance issued for PFI in IT projects and for
Local Authorities issues in 2000 and 2001 respectively.
4. A "refinancing" is where the private sector contractor
restructures its debt to secure a financial gain. The public sector
now shares in this gain on a fifty percent basis.
5. The Office of Government Commerce is an Office of HM Treasury and
was set up on 1 April 2000 to act as a catalyst for improving
departments' commercial activities in the field of government
procurement. Partnerships UK is a PPP, with a public sector mission
to work with public bodies to support and develop their PFI and PPP
projects. It is owned 49% by HM Treasury and the Scottish Executive,
and 51% by private sector companies.
6. Authorites needing advice in relation to the guidance should
contact the Office of Government Commerce/Partnerships UK helpline
service, details of which can be found on the PUK website at
www.partnershipsuk.org.uk from 5 August.
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