PFI Contracts Review
The service allows NHS organisations to engage LPP, working in partnership with external PFI specialists, to look hard at their existing operational PFI contracts, and to institute measures to drive efficiencies and make savings in PFI contracts in line with the latest HM Treasury guidance. The suppliers will help and support LPP to provide member trusts with a ‘one stop shop’ multi discipline (financial, technical, legal) PFI efficiency review service.
Benefits of the contract
The service allows NHS organisations to have a review of their PFI contract, something that has historically been seen as 'untouchable'.
- An OJEU compliant route to market for PFI specialist advisors.
- The selected external advisors are highly experienced PFI finance, technical and legal experts who have a proven track record of delivering significant PFI savings across the public sector.
- Proven service with the first review delivering an optimum price reduction to the organisation of £4.81m on the soft FM element of the PFI contract over the next five years. This reduction represents a saving of around 12 percent on the annual spend on soft FM services, whilst maintaining service levels to the required standard.
- Services provided on a fixed or capped fee based on a competitive standard day rate rather than the ‘success fee’ model commonly adopted by commercial advisory organisations. This allows the NHS to keep all of the benefits delivered.
The support to identify PFI operational savings works in a number of ways, ranging from light-touch desktop review to full implementation support, including:
- Compliance check - independent desktop review of project documentation and non-technical contract compliance;
- Contract management review - independent evaluation of contract management arrangements (including governance, systems and controls, resourcing, knowledge management) and recommending improvements;
- PFI savings review - detailed analysis of the PFI contract documents and financial model to identify and quantify savings; stakeholder workshops to prioritise these, and delivery of a high level implementation plan;
- Implementation support - provide additional commercial capability to the client organisation, including support in negotiating and documenting the savings; and
- Commercial support on specific contract issues, such as benchmarking, dispute resolution, insurance premium risk sharing, refinancing.
The LPP PFI team is happy to visit you for exploratory talks on a without commitment basis. To take this initiative forward, please get in touch with Edward James, Workstream Lead, at LPP (e-mail: firstname.lastname@example.org, or call 020 7188 7188 x53804).
- BDO (Lead), Ward Hadaway (Legal), Mott MacDonald (Technical)
- CIPFA (Lead), Trowers & Hamlins (Legal), Leviathan Consulting (Technical)
- Local Partnerships (Lead), Green & Kassab (Technical)