Next step in procurement evolution announced by Gordon Brown meets with broad industry approval.
Chancellor Gordon Brown outlined a new generation of PFI schemes in the budget this week. All future projects will have design work done at a much earlier stage in the procurement process, in line with RIBA's 'Smart PFI' recommendations. In his announcement Mr Brown also said that:
- A blueprint would be drawn up to improve the public sector's performance as a PFI client, dismissing speculation over the procurement route's future.
- The Treasury's Public Sector Construction Clients' Forum is to publish an in-depth analysis of the impact of construction on the UK this summer.
- The Operational Taskforce would offer advice and assistance to the public sector and develop guidance and codes of conduct between the public and private sector.
- The private sector would be engaged earlier in the PFI procurement process.
- That the government would pilot a new delivery mechanism that would act as a third-party project manager. This body would be able to advise both public and private sector parties over decisions within an individual PFI project, would have a stake in the project but could advise independently.
Tim Steadman, partner at the PPP division at law firm Clifford Chance said the PFI announcement was a positive move by the government and a way of showing it's support for PFI at the highest level. He said: "PFI has faced criticism and the market has been worried, especially over projects such as Bart's hospital. This announcement will reassure the industry that PFI is here to stay."
Meanwhile the RIBA has hailed the Treasury's announced changes in PFI design procurement, praising it for acting swiftly and decisively after their meeting earlier this month.
RIBA president Jack Pringle said: "The Treasury has clearly listened to the RIBA and acted to improve the standard of design and procurement of future PFI projects. Poor design must be tackled head-on if we are to maximise the value of this major investment in the nation's health and education. I am pleased that they have acted so swiftly and decisively on the issues and proposals we identified. We will continue to work closely with the Treasury to help develop these proposals through to a satisfactory delivery."
The Treasury has said that future PFI schemes must have much more work done up front before they go to the market, in line with the RIBA's ‘Smart PFI' proposals. Design work will now be carried out at the earliest stages of procurement, before the construction team has been identified.
The RIBA believes that this change in procedure will bring an improvement in design, and will enable more accurate analysis of costs of projects.
Not everyone was pleased, though; Skanska's Simon Hipperson said: "It's a backward step where the contractor does not own design and a fundamental attraction for us is to bring all our expertise to the project. Just being handed design is of little interest to us."