Press Releases

Quicker, and Better PPP Projects Heralded by Paul Boateng

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.

Press Enquiries please contact Malcolm Graves at HM Treasury on 07785 316773 malcolm.graves@hm-treasury.gsi.gov.uk or James Worron at the Office of Government Commerce on 7211 1454 or james.worron@ogc.gsi.gov.uk