Treasury wants second audit of local authority PFIs

A Treasury-led review of local authority PFI projects at pre-preferred bidder stage is on the cards, it emerged at the Local Authority PFI Policy Forum last week

The Project Review Group (PRG), which oversees the approval process for local authority PFI schemes, is currently looking for two PFI schemes to test-drive this second stage review. If the trials are successful, the reviews will be applied to at least 40% of all local authority PFI schemes.

A Treasury spokesman told CJ: “We are looking for two schemes on which to pilot these second stage reviews. At the moment the PRG reviews all local authority PFI schemes before procurement begins. We think it is important that a second stage review takes place just before the preferred bidder is chosen. The review will be specifically looking at how the projects comply with standardised documentation and whether there are any affordability issues.”

The reviews will be carried out by Partnerships UK on behalf of the PRG. The spokesman dismissed concerns that the reviews could lengthen the procurement process. He said: “That is not the intention. The idea is to add value to the later stages of the procurement process by providing this additional scrutiny. Partnerships UK will spend no more than a few days looking at each scheme.”

If the pilot schemes are successful, the second stage PRG reviews will be applied to at least 40% of local authority PFI schemes. The spokesman said: “Initially we are aiming for around 40% of projects. We think this is a meaningful percentage. These will be chosen randomly and some we will select ourselves if, for example, the scheme is particularly large or innovative.”

If the pilots are successful the second stage reviews will be introduced next year. 

* More coverage of the Local Authority PFI Policy Forum can be found on page three.