Website of the Department of Health

28 November 2008

Treasury's Value for Money Assessment for PFI: guidance for NHS build schemes

In August 2004 the Treasury introduced a new approach to appraising the value for money of procurement through the Private Finance Initiative (PFI) compared with conventional public capital procurement. This involves undertaking qualitative and quantitative value for money assessments at Outline Business Case (OBC) stage and also a new qualitative value for money assessment between OBC and the Final Confirming Business Case (F(C)BC).

Guidance for the NHS was first produced by DH in 2005 after a consultation period - this has now been superseded. Treasury changed its own guidance in 2006 and 2007, mainly involving detailed changes in the qualitative assessment, while the quantitative assessment remains fundamentally unchanged save for changes in format and presentation. These have now been incorporated into the new DH guidance and accompanying quantitative VFM model in Excel. 

• Treasury's Value for Money Assessment for PFI: guidance for NHS build schemes

8 November 2007

Social Care PFI Initiative

The private finance initiative (PFI) procurement method may also be used by Local Authorities (LAs) for the development of adult social care. 

• Social Care PFI Initiative

18 June 2007

Roles and responsibilities in the approval of NHS foundation trust PFI schemes

The attached document outlines the roles and responsibilities of those involved in prospective NHS foundation trust private finance initiative (PFI) schemes

• Download Roles and responsibilities in the approval of NHS foundation trust PFI schemes (PDF, 148K)

18 April 2007

Revised output specifications, payment mechanism and calibration model

Following the revisions to the Payment Mechanism in February 2006, further work has been carried out post-consultation and a final version is now available. As part of this work the output specifications have been rewritten and a calibration model has been produced which is to be used by trusts to assist in calibrating the payment mechanism.

• Department of Health Standard Form Project Agreement (Version 3)

14 February 2007

Framework for the identification and validation of heads of claim arising from cancelled or rescoped PFI schemes

The decision to contribute towards such claims in whole or in part is discretionary. This document has been prepared on the basis that trusts do not accept liability for any cost increases incurred as a result of a scheme being cancelled or rescoped; where trusts do decide to make such a contribution the principles set out within it provide certain guidelines as to what is acceptable to the Department

• Download Framework for the identification and validation of heads of claim arising from cancelled or rescoped PFI schemes (PDF, 100K)

12 July 2006

Code of Practice on benchmarking and market testing

The Department of Health, in conjunction with the PPP Forum, has developed guidance on handling market testing in NHS PFI projects, being aware that some Trusts are now approaching the first market test in their contracts. As the Treasury is also developing government-wide guidance on market testing, the NHS guidance is interim. The Treasury guidance is being developed in coordination with the NHS guidance, so no contradictions are anticipated. This guidance is effective immediately.

• Benchmarking and market testing in NHS PFI projects: Code of Best Practice

27 February 2006

Updates to the Standard Form Contract including the new Payment Mechanism

See the Standard Contract section for further updates to the NHS Standard Form Contract. These  include a new Payment Mechanism and Energy Principles Paper resulting from last year's consultation exercise.

• Department of Health Standard Form Project Agreement (Version 3)

31 January 2006

New EU procurement directive - 'Competitive Dialogue'

Information and guidance on the new procedure introduced in the public sector procurement directive (2004/18/EC). It has been implemented in the UK by statutory instrument (SI 2006/5) to be effective from 31 January 2006. It is for use in the award of complex contracts such as those for the Private Finance Initiative (PFI).

• New EU procurement directive - 'Competitive Dialogue'

29 September 2005

Changes to the business case approval process for major capital schemes (Gateway No. 5569)

New guidance on changes to the way Strategic Outline Cases (SOCs) and Outline Business Cases (OBCs) are to be approved. It will apply equally to both Private Finance Initiative (PFI) and public capital funded projects.

Please note that this guidance supersedes the relevant sections of the delegated limits guidance.

• Download Changes to the SOC and OBC approval process for major capital schemes (PDF, 35K)

Service Failure Guidance (Gateway No 5572)

This note clarifies how the guidance should be applied in NHS PFI schemes

• PFI guidance note: Service failure points and replacement of sub-contractors