22 July 2005
The management of Private Finance Initiative contracts is to come under intense scrutiny by Partnerships UK amid concerns that civil servants lack the expertise necessary to oversee them, Public Finance has learned.
PUK, which has concentrated on helping government departments negotiate PFI contracts, is shifting its focus to the management of projects once they are operational.
The Treasury agency is now working specifically to identify where the skills gaps occur and to draw up strategies to tackle them.
David Kent, formerly head of contracts and competition for the prison service, has joined PUK to oversee the programme.
'There are over 500 projects in operation and there seems to be a consensus that it's not clear whether they're delivering the benefits they should be, or that those managing the contracts are receiving the advice, guidance and support they need to get the benefits out of those contracts,' he told PF.
The programme is being launched amid recent criticisms from the National Audit Office and Parliament of the way PFI contracts are managed. Their investigations have found that many civil servants do not have the technical and commercial skills required to oversee complex, long-term projects.
Last month, Public Accounts Committee chair Edward Leigh demanded radical reform to the civil service to allow recruitment of specialist PFI staff on higher salaries.
Kent said PUK's analysis of existing contracts would focus on governance structures; the operation of contract mechanisms such as performance management and penalty regimes; and joint working arrangements between public bodies and private contractors.
Initial research, examining more than 100 PFI and public-private partnership projects, has already been conducted and early findings are being analysed.
PUK's initial research has found that only 65% have a dedicated project management team.
'There is a correlation between having a dedicated team and [a contract] being deemed to be performing well. A contract will only deliver what it is supposed to deliver if it's managed properly,' Kent said.
The ultimate aim of the project, he added, was to produce guidance and best practice information that could be disseminated across Whitehall.
PFjul2005
