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Private finance initiative (PFI)
- PFI guidance
- New standard preliminary invitation to negotiate (PITN)
- New standard prequalification questionnaire
- New standard output specifications
- Standard contract
- Land and buildings in PFI schemes
- Design development protocol for PFI schemes
- Generic economic model PFI schemes
- Learning lessons from postproject evaluation
- Improving PFI procurement
- Changes to Treasury Green Book
- Investment in IM&T in the NHS
- Social Care PFI Initiative
- New hospital schemes
- Investment Guidance RouteMap
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PFI guidance
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Last modified date:26 January 2007
We gave notification in November last year that the original 1999 guidance manual was being suspended whilst it was being updated. One of the key elements of this task is to take account of the work going on to produce the Department of Health's own guidance for the NHS on implementing the Treasury's new value for money guidance which was published in August 2004.
'road test'
The Health Department's guidance will appear in two phases - an interim document, which will be ready shortly, to 'road test' the new methodology, followed by a final version which will take into account the lessons learnt. This will mean more changes and amendments need to be made to a number of chapters in the manual, which will in turn mean a significant delay to the publication of a fully revised version of the PFI guidance.
In the interim we have therefore decided to reinstate the original guidance but with some chapters and specific passages removed (these are in 'strikeout') where these have been entirely superseded by other new guidance on this website. Chapters which are still useful in part but which are now heavily augmented by new guidance on the website we have left for the moment (eg 'The Invitation to Negotiate', 'Design quality'). Note that all the new guidance published on this website will in turn be rearranged shortly into a more user-friendly format.
There are two new items of guidance/information which are now being included for the first time:
Equipment
We have struck out the paragraphs on Equipment in Chapter 9 Section 3. These are superseded by new 'stand alone' guidance which is below:
Batching
The 'Batching initiative' in the NHS under which two or three schemes are taken forward at the same time is now well established since its launch in 2003. We are now preparing specific guidance on Batching which we aim to have available on this website in Summer 2004.
Balance sheet treatment
We are taking this opportunity to clarify the position on balance sheet treatment in NHS PFI schemes. All the references to achieving an off-balance sheet treatment in the manual have been struck out as this is not a requirement (eg see the references in Section 3 Chapter 4 'The accounting treatment of schemes'). The new guidance which NHS Trusts, their financial advisers and auditors must follow is: HMT Technical Note 1 (Revised) published in 1998 stated that: "The objective of PFI procurement is to provide high quality public services that represent value for money for the taxpayer.
It is therefore value for money, and not the accounting treatment, which is the key determinant of whether a project should go ahead or not". This position was reiterated in the HMT publication 'PFI: meeting the investment challenge' published in 2003. The FBC should set out the balance sheet treatment in accordance with HMT Technical Note 1 (Revised) and the FBC should include opinions as to the balance sheet treatment from: The Trust's External Auditor; Trust Director of Finance; Trust's financial advisers.
The affordability implications of the balance sheet treatment should also be clearly be set out. It is quite usual for the auditors to rely on the financial adviser's opinion. However, it is the auditor's and Trust Director of Finance's opinions which are crucial for the FBC approval. Usually balance sheet opinions have caveats to the effect that even small changes to the contract could affect the balance of risk transfer and the on/off opinion. It is therefore important that the balance sheet opinion is updated if there are any relevant changes to the contract/structure of the project.
Appointment of preferred bidder checklist
The appointment of preferred bidder has replaced Full Business Case (FBC) as the key formal approval stage for Treasury and the Department. A revised Preferred bidder checklist will appear here shortly. In the interim period, queries should be addressed to
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