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Improving Transparency, Foundation Trust status, new Business Case checklists and Version 3 of the PFI Standard Form Contract

  • Last modified date:
    8 February 2007

The Government agreed in July 2002 to produce a 'Plain English Summary' version of the Standard Form Contract and an 'Executive Summary' of the final Full Business Case to be used by Trusts with PFI schemes

1. Improving Transparency

In response to the House of Commons Health Select Committee's Report on the "Role of the Private Sector in the NHS", the Government agreed in July 2002 to produce a 'Plain English Summary' version of the Standard Form Contract and an 'Executive Summary' of the final Full Business Case to be used by Trusts with PFI schemes.

Completed copies should be included in the copies of the respective business case and project agreement which are made publicly available after financial close. These should also be enclosed in the FBC when it is submitted to the Strategic Health Authority (SHA) for approval.

The summary of the contract should require very few amendments although changes due to scheme specific factors should be included. Wording for the section on employment matters and pensions has not quite been finalised; this will follow shortly either on its own or included in a Version 2 of this document.

The FBC 'Executive Summary' is essentially a pro-forma document which has to be completed from scratch. To help Trusts an example has been prepared based on the Gloucester Hospital PFI project which reached financial close in May 2002; this is also below.

Although these documents should always be included in the final published FBC and Project Agreement, their main purpose is to be placed on the Trusts' websites to present a succinct, user-friendly summary and explanation of all the key facts and statistics for the project. Most Trusts' now have their own websites and these often include information about any capital investment projects which are going ahead. Some have a dedicated sub-site specifically for the scheme. The aim is to make full use of this new and growing form of communicating with staff, patients and the wider public and to ensure that all Trusts are presenting as much information as possible about their schemes.

2. Foundation Trust status

New guidance addressing what happens if a Foundation Trust becomes insolvent whilst in a PFI contract is below. A new 'Deed of Safeguard' is now included as Schedule 20 to the main Project Agreement and can now be found under the icon 'Standard Contract (Version 3)' below on this website but also reproduced below for ease of reference. The 'Deed of safeguard' will have to be signed with the effect that the Secretary of State becomes liable to pay any monies if the Trust becomes unable to make payments. It will only apply for schemes over £10 million.

3. New Full Business Case (FBC) checklists

Below are new FBC checklists - one for a PFI project the other for a public capital scheme - which must be completed by the trust and then the SHA and DH as appropriate. The PFI FBC checklist is new - April 2005 - replacing the one previously  on this site dating from August 2003. The change is because amendments are needed to Paragraphs 15.1 and 15.2 in the 'Accounting Treatment' section. These take account of the new guidance on Balance Sheet treatment published under the 'PFI guidance' icon above at the beginning of April 2005.

4. Standard Form PFI Contract - Version 3

This supersedes the second version published in November 2000 and is intended to be the definitive version of the standard form. As before, all of the schedules and two versions of the project agreement have been placed under the icon for the contract in the section below on guidance ('Guidance on PFI build projects'), one of which highlights the amendments which have been made to the November 2000 version. The other document is a "clean" version of the new agreement.

The attention of anyone wishing to use the project agreement is drawn to the "Important Notice" set out on the front of the revised version. That notice provides details of the restrictions that apply to the use of the standard form and those schemes on which it can be used.

In compiling this version the Private Finance Unit have considered deviations from the previously published version of standard form agreed on signed deals, those points raised consistently by bidders during the tender phase of projects, the views of private sector lawyers and updated guidance issued by OGC/HM Treasury.

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