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PFI Procurement

  • Last modified date:
    8 November 2007
  • Gateway reference:
    8451

A local authority’s (LA) intention to bid should be formalised via an Expression of Interest in which the project is outlined, and value for money and affordability assessments are carried out. In addition, all bids must meet the policy criteria to be successful.

Minister’s approval in principle will be sought for the Expression of Interest. Once received, the LA should produce an Outline Business Case (OBC), to be submitted within 6 months of the Ministerial approval in principle.  This case is reviewed by DH and the 4ps, (Public Private Partnership Programme, supporting PFI in LAs) and then by PUK (Partnerships UK).  Once the PUK review is complete, the case is then presented to the Treasury’s Project Review Group.  If the case is approved, the award of PFI credits is endorsed, and the amount fixed.

Following approval of the OBC, an OJEU for the project may be issued.

The form of contract for social care projects is the Treasury’s SOPC (Standardisation of PFI Contracts), of which version 4 is now available. Its use, and any derogations, must be approved by PUK. LAs should continue to keep in touch with PUK as the contract is developed.

Liaison with DH will continue throughout the procurement.  A Full Business Case (FBC) must be submitted before contract signature, for approval by DH and PUK.   

Guidance and standard documents

A Social Services Procurement Pack, containing guidance and standard documents, has been developed by the 4ps. See the 4ps website.

For advice from 4ps on procurement and on the operation of the 4ps Gateway Reviews system, contact Brian Johnston

Procurement via LIFT

For an LA to use LIFT as a procurement route, they must have been included in the original LIFT OJEU notice, and be signatories to the LIFT's Strategic Partnering Agreement (SPA). For a specific project to be considered for development this must be included in the Strategic Service Development Plan (SSDP) for the LIFT. The SSDP is a PCT lead process whereby on an annual basis they consult with their stakeholders to identify the priorities across their health and social care economies.

LIFT generally develops a batch of buildings together. Local Authorities may be developing integrated facilities with their PCT or they may be working direct with their LIFT company as the sole, or main partner, for the buildings. In all cases normal LA governance and approval processes must be followed.

LIFT is underpinned by a standard set of documents which are all available from the Partnerships for Health (PfH) website:

If the LA is considering using PFI credits there is a laid down approval process. This requires expressions of interest to be submitted for Ministerial approval in principle to be obtained, as for a PFI procurement. There is a template for expressions of interest. This is currently being update and should be available by the end of May 2007.

Following approval, an OBC must be developed, and approved by DH and HMT PRG, before LIFT Stage 1 approval can be sought. An FBC must be approved before the Lease Plus Agreement can be signed. This is largely an update of the OBC.

Payment of PFI Credits

Please note that PFI credits in their annuity form are not paid to the LA until the facility, developed under this procurement, is in operation and a unitary charge is payable. Evidence of the UC will be required before payment begins.

Current Schemes

Details of schemes in procurement and schemes reached financial close (tables showing Local Authority,contact, and type of scheme).

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