PFI review

Report: 14
Date: 29 May 2002
By: Treasurer

Summary

The report presents a summary version of the PFI review carried out by 4Ps with proposals for taking forward its recommendations.

A. Recommendations

The Committee is recommended

1. To note the findings and recommendations of the review of PFI
2. To agree that PFI-type options for major capital investment proposals can be brought forward for consideration where appropriate
3. To request the Director of Resources, with the Treasurer, to report on how 4Ps' recommendations for the future should be actioned.
4. To ask the MPS to consider what actions to take on the recommendations specific to existing contracts.

B. Supporting information

Introduction

1. Since its establishment the Authority has approved the contracts for two PFI projects, the negotiation for which commenced under the previous Home Office regime: the firearms and public order training facility at Gravesend and South East London police stations. However a number of concerns arose during the Authority's consideration, particularly in relation to the South East London scheme. Consequently the Finance Planning and Best Value Committee agreed that the Treasurer should initiate a review of the lessons to be learned from the MPA/MPS experience of PFI before any future PFI procurement is commenced.

2. In October 2001 the Committee agreed a proposal that the review should be carried out by 4Ps, the organisation set up specifically to advise local authorities on PFI and other major project procurements.

Review report

3. The review was carried out by Fred Portnell, a consultant with 4Ps, and Brian Smith who has just retired as Chief Executive of Stoke-on-Trent City Council which has successfully completed a substantial PFI project in the Education service.

4. The full report is available to members on a confidential basis because it includes references to existing contracts which may be commercially sensitive. However the principal objective of the review was to learn lessons for the future and the attached version includes a summary of the findings and recommendations and the complete section on recommendations for the future.

Conclusions

5. Members will note the recommendation of 4Ps that 'serious consideration should continue to be given to alternative funding solutions such as PFI'. The pressure on the Authority's conventional capital resources remains and, if anything, has been increased as a result of the decisions on the funding of the C3i project. It is therefore proposed that PFI-type options for major capital investment proposals should now be brought forward for member consideration where appropriate.

6. Such proposals should be managed within the framework of recommendations made by 4Ps. There are particular implications for the property and procurement functions of the MPS. It is suggested that the Director of Resources should report back, with the Treasurer, on how individual recommendations will be actioned.

7. The MPS should also consider those recommendations specific to existing contracts and determine the appropriate action.

8. The Authority should continue to draw on the advice of 4Ps which, on current issues, is generally free to local authorities.

C. Financial implications

The review report has been provided within the sum agreed by the Committee.

D. Background papers

None.

E. Contact details

Report author: Peter Martin, MPA.

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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