NAO Good Practice Briefing for PFI/PPP (April 2006) · 2 april 2006 | pfi and ppp fOCUS contents...

nao good practice briefing for

PFI/PPP

pfi and ppp fOCUS | april 2006

Focus

Working in partnership

april 2006 | pfi and ppp fOCUS 2

contents

Welcome 3

RecentNAOPFI/PPPreports 4

Currentworkinprogress 4

TheNAOPFI/PPPteam 5

FocusonRefinancing 6

FocusonAchievingGoodPracticeinPFI/PPP 10

Bringingaboutbeneficialchange 14

WElCOME

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welcometothisfirstissueofPFI/PPPinFocus.ThepurposeofthispublicationistogiveyouanoverviewofkeythemesfromourrecentPFI/PPPstudiesandanupdateonourcurrentwork.ItalsohighlightsrecommendationswehavemadeandgivesdetailsofeventswearerunningtopromotegoodpracticeinPFI/PPP.Ihopethatyoufinditinformativeanduseful.

HavingjoinedtheNAOinJune2005fromacareerinthebankingsector,Iamnowexperiencingwhatit’sliketobeontheothersideofthepublicprivatepartnershipandappreciatingthechallengesfacedbythepublicsectorwhenprocuringandmanagingprivatelyfinancedprojects.Comingfromaverylargefinancialinstitutionbenefitingfromhighdealflowandteamsofin-housespecialiststoadviseoneveryaspectofatransaction,thecontrastwithapublicauthorityundertakingperhapstheirfirstandonlyPFI/PPPdealisstriking.TheworkoftheNAOindisseminatingbestpracticethroughourreports,seminarsandworkshopshasbeenandremainsanimportantwayofbridgingthegapbetweenthetwoparties.

TheuseofPFIandPPPcontinuestoattractagreatdealofattentionandtoexcitearangeofviewpoints.IrrespectiveofthewiderdebatesaboutthemeritsofPFIandPPPdeals,theroleoftheNAOistoprovideindependentandimpartialanalysistoParliament.Intotal,wehavepublishedover50reportsonavarietyofPFIandPPPtopics,coveringdealswithacombinedvalueofover£77billion.Wecontinuetohaveaninterestinthevalueformoneyobtainedfromindividualdealsandalsoincross-cuttingthemessuchasrefinancingandbenchmarking.Fullcopiesofthesereportsandrelatedmaterialsareavailablefromourwebsite(www.nao.org.uk).

AspartofourcommitmenttohelpdepartmentsbringaboutbeneficialchangewehostanannualPFI/PPPconference(thisyear’swilltakeplaceon13thJune2006–seepage14forfurtherdetails)andarangeofworkshopsincludingourpopularworkshoponManaging PFI Relationships to Achieve Success.Furtherdetailsoftheseeventsaresetoutinthisnewsletter.Youmayalsofindourrecommendationsdatabaseusefultoyourownwork,andyoucanfindthisonourwebsite.

Finally,asalways,wewelcomeyourinputandideasforareasthatyouthinkweshouldexamine,andwearekeentorespondtoyourneeds.IfyoufeelanNAOexaminationcouldimprovethedeliveryofaservice,helpidentifyandspreadgoodpracticeorhighlightareasofconcern,wewouldliketohearfromyou.Pleasedonothesitatetocontactmedirectlyatanna.simons@nao.gsi.gov.uk,ormakecontactwithanyothermemberofourPFI/PPPteam.

Anna Simons Assistant Auditor General

Wider Markets initiative (HC 799, Session 2005-06), 27th January 2006.Thisreportlooksatprogressinimplementingthisinitiative,whichencouragespublicbodiestoimproveassetmanagementandtoseekopportunitiesforcommercialexploitationofassets(seepage11forfurtherdetails).

progress on the Channel Tunnel rail link (HC 77, Session 2005-06), 21st July 2005.Section1oftheChannelTunnelRailLink(CTRL)wascompletedontimeandslightlyundertargetcost.Section2isoncoursetobecompletedontimeandclosetotargetcost.Thereportnotes,however,thatpassengerrevenuesremainwell-belowforecastsandcallsfornewguidanceastohowtomakeforecastsmorerealistic.

The refinancing of the norfolk & norwich pfi Hospital (HC 78, Session 2005-06), 10th June 2005.Anexampleofanearlyrefinancingwhichbroughtrisksaswellasbenefitstovalueformoney(seepage7).

department of Health - innovation in the nHS: local improvement finance Trusts (HC28, 2005-2006), 19th May 2005.OurexaminationlooksatwhetherLIFTisasuitableprogrammetosupportimprovedcommunity-basedhealthservicesthatmeetlocalneedswhileprovidingvalueformoney.Thereportispositiveaboutthebenefits

oftheinnovativestructureofLIFT-particularlytherequirementthatprojectsareagreedinthecontextofalocalstrategicplanandtheflexibilityitallows–butcallsforthestrengtheningofaccountabilityandperformancemeasurementframeworks(seepage12).

darent Valley Hospital: The pfi Contract in action (HC 209, Session 2004-05), 10th february 2005.ThereportprovidesanupdateonwhatwastheveryfirstPFIhospitalcontract.Thehospitalopenedtwomonthsearly,tothepriceagreedinthecontractandserviceperformancehasbeensatisfactory.Thereporthighlightsissuesinvolvedindevelopingbetterperformancemeasurementsystems,theseniormanagementeffortneededtomanageaPFIcontractinitsearlyyearsandarefinancing(seepage8).

accommodation for the department of Work and pensions: transfer of property to the private sector under the expansion of the priME contract (HC 181, Session 2004-05), 26th January 2005.TheDepartmentnegotiatedthisdealwiththeexistingcontractorbyintroducingcompetitivetensionintothenegotiations.Theoutcomewas£220millioncheaperthanacrediblecommercialalternative.

Recent nAo PFI/PPP RePoRts

cuRRent woRk In PRogRess

rECEnT naO pfi/ppp rEpOrTS

april 2006 | pfi and ppp fOCUS4

Thefollowingareexpectedtobepublishedsoon:

Update on pfi debt refinancing and the pfi Equity Market: ThisprovidesanupdatereportonhowthenewarrangementstosharerefinancinggainsareworkingandrecentdevelopmentsinthePFIequitymarket(tobepublishedon21stApril2006-seepage6).

national physical laboratory:ThisreportwilllookattheconsensualterminationofthePFIcontract.

Evaluating the implementation of pfi:ThisreportwillsetoutamethodologyforevaluatingtheimplementationofPFIacrossGovernment–seepage10forfurtherdetails.

THE naO pfi/ppp TEaM

pfi and ppp fOCUS | april 2006 5

TheNAOPFI/PPPteamcomprisesaround20professionalstaffunderthedirectionofJamesRobertson,PatriciaLeahyandDavidFinlay(seebelow).TheteamismadeupofexperiencedpublicsectorauditorsandstaffwhojoinedtheNAOfromcareersinbanking,economicsandprivatesectorcontracting

Inadditiontoourcoreworkofproducingvalueformoneyreports,weofferarangeofservicestosupportourstatedaim,whichisto“helpdepartmentstobringaboutbeneficialchangetopublicservices.”Theseincluderunningworkshopsandconferences;andourwebsitehostsafully-searchabledatabaseholdingalloftherecommendations

madeasaresultofourwork.WearealsoactiveontheinternationalsceneandchairtheWorkingGroupontheAuditofPrivatisationforInternationalOrganisationofSupremeAuditInstitutions(INTOSAI).Furtherdetailscanbefoundonpage15.

WehavedeepenedtheindependentassuranceweseekwhenplanningourPFIstudiesandwhenconsideringtheconclusionsreachedtoensurethatarereportsareashelpfulaspossiblefortheCommitteeofPublicAccountsandgovernmentdepartments.Asever,wewouldbeinterestedinhearingyourviewsonourworkandonhowwecanhelptoimprovethevalueformoneyofPFIandPPPdeals.

the nAo PFI/PPP teAm

DAvID [email protected]

DavidFinlayisDirectorofPFIDevelopmentattheNationalAuditOfficeandisresponsiblefortheNAO’sexternalrelationswiththePFIsector.Heisacharteredaccountantwhosecareerhasspannedboththeprivateandpublicsectors.DavidwasoneofthefoundingmembersoftheNAO’steamofPFIspecialistsandhasledmanyoftheirimportantPFIexaminations.TheseincludetherecentNAOreportsontheDarentValleyandNorfolk&NorwichPFIhospitalsandtheircross-governmentstudyonPFIrefinancing.DavidalsorunstheNAOprogrammeofworkshopsonmanagingPFIrelationships.

PAtRIcIA leAhy [email protected]

PatriciajoinedtheNationalAuditOfficein1996afterworkingintheTreasuryandinvestmentbanking.ShehasdirectedarangeofPPPstudiesincludingthreeontheLondonUndergroundPPPaswellasontheLIFTinitiativeforprimarycareservices,thePPPforNATS,MoD’scontractfortheDefenceFixedTelecommunicationsSystem,theRadioCommunicationsAgency’sJointVenturewithCMGandthecommercialisationofresearch.Shehasalsocarriedoutreportsonprivatisationsandacquisitions.

JAmes RobeRtson [email protected]

JameshasbeenDirectorofPFIValueforMoneyStudiessinceJanuary2004.HeisaneconomistbytrainingandhasworkedpreviouslyinthiscapacityintheEmploymentDepartment,DepartmentofEnergy,DepartmentofTradeandIndustry,DepartmentforTransportand,beforejoiningtheNAOin1995,wasChiefEconomicAdvisortotheDepartmentforEducationandEmployment.

In2002thegovernmentagreedwiththeprivatesectornewarrangementswhichwouldprovideforrefinancinggainsonPFIdealstobesharedbetweenthepublicandprivatesectors.Innewdealsrefinancinggainswouldbeshared50/50.Indealsalreadyinexistencetheprivatesectoragreedgenerallytoprovidethepublicsectorwith30percentofanyrefinancinggainunderthetermsofanewvoluntarycodefortherefinancingofearlyPFIdeals.ThenewarrangementsforsharingrefinancinggainswereintroducedbytheOfficeofGovernmentCommercewhichthenhadresponsibilityforPFIpolicy.ResponsibilityforPFIpolicynowrestswithHMTreasury.

Ourstudyhasexaminedhowthenewarrangementstosharerefinancinggainshavebeenappliedtorefinancingswhichhavebeencompletedsincethosenewarrangementscameintoforce.ItalsolooksattheextenttowhichtheOGC’sestimatesforamountsitexpectedthepublicsectortoreceivefromsharinginPFIrefinancinggainsarebeingachieved.TheNAOreportwillalsocoverrecentdevelopmentsinthePFIequitymarketincludingtheemergenceofthesecondarymarket.

Thisreportwillbepublishedon21stApril2006

uPDAte on PFI Debt ReFInAncIng AnD the PFI equIty mARket


fOCUS On rEfinanCing

Focus on ReFInAncIng

Keyfindings:

n TherehavebeenrefinancingopportunitiesonearlyPFIdealswhichhavebeensuccessfullydelivered.

n Refinancingscanbecomplexandneedcarefulscrutinisingbythepublicsector.

n Anyproposalwhichincreasesrisktothepublicsectorneedstoberigorouslyassessed.


Therefinancingofthisdealgeneratedgains,innetpresentvalueterms,of£115million,andtheinternalrateofreturntotheshareholdersofOctagonincreasedasaresult:from16percentto60percentfollowingtherefinancing.TherefinancinggeneratedlargegainsforOctagonprincipallybecausetheywereabletosignificantlyincreasetheirexternalborrowings(from£200millionto£306million).Astheseadditionalfundswerenotimmediatelyneededtooperatetheproject,thiscreatedcashresourceswhichcouldbeusedtoenableOctagon’sshareholderstodrawimmediatebenefitsfromtheproject,withtheincreasedborrowingstoberepaidoutofplannedprofitslaterinthecontractperiod.Octagonwasabletosecurebetterfinancingtermsforanumberofreasons:theriskoftheenterprisewasloweroncethehospitalhadbeensuccessfullyconstructed,thePFImarketwasmaturing,andborrowingrateshadgenerallyreduced.

InthisearlyPFIhospitaldeal,thecontractualarrangementshadplacednoobligationonOctagontoshareanyrefinancinggainsarisingfromtheoriginaldeal.Octagonshared,however,approximately30percent(£34million)ofitstotalrefinancinggainwiththeNorfolkandNorwichUniversityHospitalNHSTrust.ThiswasinaccordancewiththevoluntarycodeforsharingrefinancinggainsonearlyPFIdealswhichtheTreasuryhadnegotiatedwiththeprivatesectorin2002.TheTrustcurrentlypays£37.8millionayeartoOctagon.

Therewere,however,risksfortheTrustinsecuringthesebenefits.Itagreedtoextenditsminimumcontractperiodbyfiveyearsandacceptedthepossibilitythatitsterminationliabilitiescouldincreasebyupto£257million.

TheNAOfoundthatthetermsofthebankfinancefortheoriginaldealappearcompetitiveforabankfinanceddealatthattime,althoughitmighthavebeenpossibletoimprovetheoriginaldeal.Alternativefinancingsolutionswerenotseriouslyexploredtoensurethefinancingtermsremainedcompetitiveduringatwoyeardealclosure:thiswasbecausetheTrustdidnotwishtofurtherdelaytheprojectandwasnotconvincedthattheoveralltermsofthedealcouldbeimproved.

Followingthisrefinancing,theTrustcontinuestopayafinancingpremiumcomparedtocurrentdealsbut,byenteringintothisdealinearly1998,itavoidedconstructioncostinflation(whichhasbeeninexcessofgeneralinflationinrecentyears)andreceivedthebenefitsofthenewhospitalearly.

Thereareotherfactors,however,whichcouldaffectcomparisonsbetweenthepricesofearlyPFIdealsandthoseofmorerecentdeals.SomeofthesehaveyettobefullyanalysedbytheDepartmentofHealth,andtheNAOrecommendsthattheDepartmentshouldcarryoutfurtheranalysistoidentifyhowthepricingofallelementsofPFIdealshaschangedovertime,includingwhethertheprivatesectorisdeliveringcostefficienciesfromtheirincreasingexperienceofdeliveringPFIprojects.

the ReFInAncIng oF the noRFolk & noRwIch PFI hosPItAlHC78,session2004-2005,10thJune2005



DarentValleyhospitalwasprocuredin1997underthefirstPFIhospitalcontract.Itopenedin2000,twomonthsearlyandforthepriceagreedinthecontract.ThePFIconsortiumTHCDartfordhasdeliveredthefacilitiesandservicestheNHSTrustcontractedforandtoaqualitythatoverallhasbeensatisfactory.TheTrustisalsobenefitingfromareducedannualcontractpriceasaresultofsharingingainsfromarefinancingwhichTHCDartfordcompletedin2003.

ThereportnotesthattheshareholdersofTHCDartfordhavereceivedmuchearlierandlargerbenefitsthanhadbeenprojectedwhenthecontractwasawarded.Byincreasingitslevelofborrowings,THCDartford’srefinancingyieldedbenefits,inpresentvalueterms,of£33million.TheTrustnegotiateda£12millionshareofthesegainsunderwhatwasoneofthefirstapplicationsofthenewvoluntarycodeforsharingrefinancinggainswhichtheTreasuryandtheprivatesectoragreedin2002.AsaresultoftheiradditionalbenefitsTHCDartfordshareholderswereabletorealise£37millionatthetimeoftherefinancing,justthreeyearsafterthenewhospitalopened.

AlthoughbenefitingfromtherefinancingtheTrustalsofacesnewrisks.TheTrustagreedtoextendtheminimumcontractperiodbysevenyearsandtoacceptthepossibilityofincreasedliabilitiesintheeventofthecontractbeingterminatedearly.TheTrustconcludedthatthesearrangementswerevalueformoneytakingintoaccountthatthenewminimumcontractperiodof35yearsisinlinewithcurrentPFIhospitalcontractsandtheTrustconsidereditveryunlikelythatthecontractwillbeterminatedearly.ButtheNAOcautionsthatinfutureauthoritiesshouldundertakefurtheranalysisbeforeagreeingtoarefinancingwhichinvolvesincreasedlevelsofprivatesectordebtandhigherpublicsectorterminationliabilities.

Ondaytodaycontractmanagement,theNAOconcludedthat,althoughtheserviceperformanceoverallwassatisfactory,theTrustcouldhaveawardedlowerperformancescoresleadingtohigherpaymentdeductionsforservicelapseswhichoccurredsomeinareassuchascleaningandcatering.TheNAOrecommendsthatauthoritiesshouldlearnfromtheTrust’sexperiencebyeliminating,wherepossible,subjectivityinassessingperformancetoensurethatpaymentdeductionsarecommensuratewiththeimpactofpoorperformanceontheauthorityanditspatients.TheNAOalsopointedoutthatauthoritiesshouldplanfortheconsiderableseniormanagementeffortthatwillbeneededinmanagingaPFIcontractintheearlyyears.

DARent vAlley hosPItAl: the PFI contRAct In ActIonHC209,session2004-2005,10thFebruary2005


fOCUS On gOOd praCTiCE in pfi/ppp

Keyfindings:

n AnewNAOreportwillpresentanupdatedframeworkforassessingthedesignandimplementationofPFIprojects

n TheWiderMarketInitiativeisunder-employedandrequiressupportiveleadershiptosucceed

n TheLIFTmodelhasdeliveredbenefits,buttheaccountabilityandperformancemeasurementframeworksneedtobestrengthened.

TheNAOiscurrentlyworkingtoupdateaframeworkforassessingPFIdealsfirstdevelopedin1999.The1999frameworknecessarilyfocusedonissuesarisingduringtheprocurementofdealsratherthanduringthelifeofthecontractas,atthattime,fewdealshadenteredintotheiroperationalphase.Theupdatedversionbuildsonthe1999framework,drawingupontheexperienceofthemanydealsthathavebecomeoperationalsincethen.

TheassessmentframeworkisbasedonamatrixstructurethatdividesthelifecycleofaPFIprojectintosixphases(threebeforeadealissigned;threeafter)andsixbusinessmanagementthemessuchasthefitwithbusinessrequirementsandriskallocation.Ananalysissetsouthowthesixbusiness-managementthemesapplytoeachphaseofthelifecycle,highlightingthekeyissuesthatanevaluatorshouldconsiderineacharea.

Whilsttheframeworkisintendedtobeusedforretrospectiveaudit,ithasthepotentialtobeusedalsoasatoolfortheongoingmonitoringofprojects.Servicemanagers,leadprojectofficersandDepartmentalPrivateFinanceUnitsmayallfindittobeausefultool:itprovidesachecklistandhasbeendesignedtocomplementbutnotreplaceexistingguidance(suchasthatissuedbytheTreasury)orsoundmanagementofprojectsingeneral.

ThereportsettingoutthisframeworkisexpectedtobeplacedonourwebsiteinMay2006.

A FRAmewoRk FoR evAluAtIng the ImPlementAtIon oF PFI (in preparation)

Focus on AchIevIng gooD PRActIce In PFI/PPP


SixphasesofaPFIproject

n StrategicAnalysis

n Tendering

n ContractCompletion

n Pre-operationalImplementation

n EarlyOperational

n MatureOperational

Currentandrecentstudieswithimplicationsforgoodpractice



TheWiderMarketsInitiativebeganin1999.TheInitiativeencouragesgovernmentdepartments,agenciesandnon-departmentalpublicbodiestomakebetteruseoftheirassetsthroughthecommercialexploitationofphysicalassets,includingequipment,landandpremises,andnon-physicalassets,suchasintellectualproperty,dataandskills.Themainincentiveistherightfordepartmentstoretaintherevenuestheygenerate.

From2001,theTreasurycontractedPartnershipsUKtoco-ordinateandpromotethisinitiative.Performanceacrossgovernmenthasbeenpatchy,however,withwidermarketsactivitiesbeingconspicuousbytheirabsenceinmanydepartmentsandagencies.SirMichaelLyonscommentedayearagothattheInitiativewasripeforre-energising.

ThereportfindsthatmostWiderMarketsactivitiesaretakingplacewheretheleadershiphasbeensupportive.Theseincludeprojectsthathavehadtoovercomeinitialconcernsaboutthesuitabilityoftheactivity,orneededspecificlegalpowers,beforegainingbusinesscaseapproval.Thebenefitsofsuccessfulwidermarketsactivityincludereducingthepublicsector’scostbaseandimprovingitsskillbase,leadingtoanenhancementofcorepublicservices.

Onlyonedepartmentinfour,however,hasactivelypromotedsuchactivitysofarandthishasbeenasmuchdrivenbyfundingpressuresasawarenessofopportunities.Athoroughassessmentofwidermarketsopportunitiesisneededandshouldincludethepotentialtomarketintellectualproperty,data-setsandknow-how.WiderMarketsactivityrequiresfurtherencouragementofacultureofwellmanagedrisktakingandthedevelopmentofadditionalcommerciallyskilledindividuals.

PARtneRshIPs uk - hm tReAsuRy: wIDeR mARkets InItIAtIveHC799,session2005-2006,27thJanuary2006


AnexampleofgoodpracticeinstructuringaPPPisgivenbytheNHSLocalImprovementFinanceTrusts(LIFT)model.OurexaminationaddressedwhetherLIFTisasuitableprogrammetosupportimprovedcommunity-basedhealthservicesthatmeetlocalneedswhileprovidingvalueformoney.ThereportispositiveaboutthebenefitsoftheinnovativestructureofLIFT–particularlytherequirementthatprojectsareagreedinthecontextofalocalstrategicplanandtheflexibilityitallows–butgoesontocallforstrengtheningofaccountabilityandperformancemeasurementframeworks.

LIFTprojectsaredesignedtodevelopprimaryandsocialcareservicesandfacilitiesinEngland,fundingforwhichhashistoricallybeeninadequateandpiecemeal.

KeyrecommendationsfromtheNAOreportinclude:

n Whenplanninganewinitiative,asystematicapproachtoevaluatingadvisoryfirmsandthequalityofcontributionsfromindividualadvisorsshouldbeestablished.Thiswouldhelpachievegoodqualityadviceandvalueformoney.

n EffectivereviewsofStrategicServiceDevelopmentPlansforLIFTschemesshouldbeundertakenregularly,inaccordancewithPartnershipsforHealthguidance.

n Guidanceabouttheinitiativeaimedspecificallyatkeygroupsofstakeholders(inthecaseofLIFT–clinicians,LocalAuthorities,PrimaryCareTrustseniormanagementandsecondaryandacutecarecolleagues)shouldbedevelopedanddisseminated.

n Inthelightofexperience,itnowseemsthattheaccountabilityframeworkofLIFTcouldusefullybestrengthened.ItwouldbebeneficialfortheDepartmenttoestablishprinciplesanddevelopguidancedefiningresponsibilityforlocaloversightoftheStrategicPartneringBoard.

DePARtment oF heAlth InnovAtIon In the nhs – locAl ImPRovement FInAnce tRustsHC28,session2005-2006,19thMay2005


Can you identify good practice in your current work? if you can, we would be interested in hearing from you.

please contact david Jackson on 020 7798 5477 or [email protected]

Topics the naO will examine in 2006 include benchmarking and market testing. if you have had experience of this topic please contact david finlay on 020 7798 7546 or [email protected]


pfi and ppp fOCUS | april 2006 1�

nEWS

the nAo conFeRence - 13 June 2006

bringing abOUT bEnEfiCial CHangE

PFI/PPP woRkshoPs AnD semInARs

bRIngIng About beneFIcIAl chAnge

AspartoftheNAO’scommitmenttohelpdepartmentsbringaboutbeneficialchangetheNAOPFI/PPPteamisabletoofferarangeofPFI/PPPtrainingeventstodepartments.TheseeventscanberunasworkshopsforindividualprojectteamsorseminarsforlargergroupsofstaffengagedindevelopingormanagingPFI/PPPprojects.Thetrainingeventswhichcanbeprovidedare:

n Managing pfi relationships to achieve success: Apracticalworkshoponimprovingpublic/privatesectorworkingrelationships.Includescontributionsfromprojectleadersinboththepublicandprivatesectorsandabusinessrelationshipexpert.

n an introduction to pfi/ppp financing (including refinancing):Atrainingeventsolelyonrefinancingcanalsobeprovided.

n Senior executive briefing: AnoverviewofcurrentPFI/PPPissuesforseniorofficialsincludingthosewhomayhavenotpreviouslybeencloselyinvolvedwithPFI/PPPprojects.

Sincethe2004launch,theNAOPFI/PPPteamhasnowdeliveredover20workshopsandseminarstoprojectteamsanddepartmentsincludingseveralNHSTrusts,theMOD,theDepartmentofTransport,theTreasuryBuildingandGCHQPFIteams.EventshavealsobeenhostedbytheNorthernIrelandAuditOffice,theScottishExecutiveandtheInternationalProjectFinanceAssociation.


TheNAOisoftenperceivedpurelyasascrutinisingbody.However,ourmissionisactuallytobringaboutbeneficialchange.ThisiswhywedevotealargepartofourPFIworktopromotinggoodpractice,asyoucanseebothfromthereportsoutlinedaboveandfromouractivitiesdetailedonthesepages.

FurtherdetailsandbookingarrangementscanbeobtainedfromDavidFinlay,NAODirectorofPFIDevelopment,[email protected]

Eachyear,theNAOhostsaconferencetodiscussthelatestfindingsfromourreportsandtoconsiderthemosttopicalandinterestingdevelopmentsinthePFI/PPPworld.Theeventiswell-attendedwithdelegatescomingfrombothcentralandlocalgovernmentbodies,consultancies,banksandotheradvisorybodiesandfromoverseas.

Thisyear’sconferencewilltakeplaceonTuesday13thJune2006.Itwillbeaninteractiveconferenceallowingthoseattendingtovoteonkeyissuesandtoposechallengingquestions

tothepanelofdistinguishedspeakers.Therewillalsobeaseriesofspecialistworkshopsonoperationalissues,financing,newformsofPPPandlocalcommunityprojects.

FordetailsonhowtobookyourplaceattheConference,pleasevisittheNAOwebsite(www.nao.org.uk/conferences).

nEWSbringing abOUT bEnEfiCial CHangE

TheUKNationalAuditOfficeisanactivememberoftheInternationalOrganisationofSupremeAuditInstitutions,orINTOSAI.

Wehaveastrongreputationforexpertiseinprivatisationandpublic-privatepartnerships,andassuchhavechairedtheINTOSAIWorkingGroupontheAuditofPrivatisationsinceitwasformedin1993.Theroledemandstechnicalknowledge,credibility,andatouchofdiplomacytoo:theworkinggroupcurrentlyhas40members(andgrowing),withgreatdiversityincultures,economicbackgrounds,andlegalandgovernanceframeworks.

Ourroleaschairistohelpidentifyandexamineemergingissues,andtoencouragememberstosharetheirknowledgeandexperiencewiththerestofthegroup.Weorganise

annualgroupmeetings(mostrecentlyinBrasilia,inSeptember2005)andkeepinregularcontactwithourfellowmembers.

TheNAOisproactiveinsharingitsknowledgeandexperienceofPFIandPPPwithoverseasbodiesinterestedinassessingvalueformoney.Forinstance,wehaveproducedasetofguidelinesonprivatisationandrelatedtopicssuchaseconomicregulationandpublic-privatepartnerships.Wehavealsostartedputtingtogetherarangeoftechnicalcasestudiestoofferpracticalexamplesandadvicetomembers.

MoredetailsofthisaspectoftheNAO’sworkcanbefoundonthewebsiteat:http://www.nao.org.uk/intosai/wgap/home.htm


InteRnAtIonAl woRk

wAnt moRe InFoRmAtIon About the PFI & PPP RecommenDAtIons DAtAbAse?Emailusat:[email protected]

orwriteto:ColinRatcliffe,NationalAuditOffice,157–197BuckinghamPalaceRoad,Victoria,LondonSW1W9SP

©NationalAuditOffice2006|LayoutandproductionbyNAOInformationCentre|DGRef:6609RC|PrintedbyHeronsgate

the DAtAbAseSince1997,wehavepublishedover50reportsofourinvestigationsintoPFI/PPPdeals.Inthesewehavemadearound1,400recommendationscoveringawiderangeofsubjectsrelatedtothesetwoimportantprocurementfields.Fortheconvenienceofclients,contractors,financiersandothersusing,orinterestedin,PFI/PPPwehavecollectedtheserecommendationsintoadatabaseonourwebsite,withthegoalofitbeingusedtosupportinformedresearch.

keywoRD AnD text seARchesIfyouhaveaqueryaboutaPFIorPPPissueandwanttodiscoverwhatrecommendationsarerelevant,youcansearchdirectlythroughthedatabase.Toaidyoursearchwehaveclassifiedourrecommendationsbypre-setkeywords.Wehavealsoincludedatextsearchfacilitysothatyoucantailorsearchestoyourrequirements.

lInks to electRonIc veRsIons oF ouR RePoRtsTherecommendationsthatcorrespondtoyoursearchcriteriaarereferencedtothereportsfromwhichtheyaredrawn.Yoursearchmayrevealarecommendationthatyouwanttoexamineinthecontextoftherelatedreport.Tohelpyou,wehaveprovidedalinkthatwillplacetherecommendationwithothersthatappearedinthesamereport.Afurtherlinkwilltakeyoutoanelectronicversionoftheparticularreport.

ADDItIonAl FeAtuResWehavebuilttwoadditionalfeaturesintothedatabasetoprovideyouwithmorerelevantinformation.ThefirstisthatPPP-relatedsearcheswillalsoidentifyrelevantrecommendationsdrawnfromourpublishedinvestigationsintoprivatisations.ThesecondistheopportunitytosearchforPFI-relatedrecommendationsandconclusionsdrawnfromthepublishedreportsoftheHouseofCommons’CommitteeofPublicAccounts,togetherwiththerelatedTreasuryMinutes.

how to FInD the PFI & PPP RecommenDAtIons DAtAbAseYoucanfindourdatabaseofPFIandPPPrecommendationsat:www.nao.gov.uk/recommendation

got A queRy?no tIme to tRAwl thRough All ouR PublIsheD InFoRmAtIon?tRy ouR PFI & PPP RecommenDAtIons DAtAbAse

www.nAo.gov.uk/RecommenDAtIon

NAO Good Practice Briefing for PFI/PPP (April 2006) · 2 april 2006 | pfi and ppp fOCUS contents...

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