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The public sector has been warned to ‘raise its game' over PFI projects, and seek value for money for all project changes. A National Audit Office (NAO) report has revealed there are now more than 500 operational projects with a combined capital value of £44bn. In 2006, public authorities paid PFI contractors an estimated £180m to make necessary changes to these projects. The NAO report noted that contractors handed urgent requests in ‘a timely manner', 90% of contract managers were ‘satisfied or very satisfied' with the quality of work done, and timescales for larger changes compared well with ‘conventionally' procured projects. But, the Government's official spending watchdog also found larger changes were not always competitively tendered, the cost of making smaller changes was relatively high, varied widely across projects for similar work, and took longer to complete than non-PFI projects. ‘PFI deals have proven to be flexible to change and, when considering that these deals will span a number of decades, that is essential,' said Sir John Bourn, head of the NAO. ‘Now that an increasing number of PFI deals are in their operational stage, and change will inevitably be needed over time, the public sector has to raise its game to get a better outcome, and use the guidance and resources available, particularly as changes made to operational projects have not always provided value for money.' Public authorities are being encouraged to use recently-produced Treasury guidance, which sets out good practice in the management of changes. The NAO has also recommended public authorities undertake competitive tendering, consider the need to pay ‘lifecycle costs', and set up forums where information can be shared across locally-managed PFI projects.

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BUSINESS

Councils urged to seek better value from PFIs

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