The Smith Institute is to compile report that will examine bid costs and maximising private sector expertise
An independent left-of-centre think tank with close links to Number 11 Downing Street is to examine ways of improving the PFI procurement process.
Wilf Stevenson, the head of the Smith Institute, is to compile a series expert reports on what lessons can be learned from the past mistakes of the PFI.
This comes at a time when the industry is stepping up its efforts to convince the government that PFI bid costs must be cut.
The Smith Institute has identified three issues that need to be addressed:
- The first is costs, which are deemed too high because the bidding process is too lengthy. This discourages smaller companies from bidding.
- The second is the public sector’s difficulty in identifying sufficiently early the services that it wants the private sector to provide over the 25-to-35-year life of the contract.
- The final issue is how to maximise private sector expertise by involving it at an earlier stage, before the preferred bidder has been selected.
Stevenson said: “Although many reports have looked at the PFI and PPP, including those produced by the Audit Commission, National Audit Office and Sir Peter Gershon, few have addressed the issue of how to make the public sector a better partner.”
Few reports address the issue of how to make the public sector a better partner
Wilf Stevenson, the Smith Institute
The Smith Institute will publish its findings in the autumn. The papers will include contributions from Peter Rogers, the technical director of developer Stanhope; Sir Stuart Lipton, its chairman; Bob White, the former chief executive of construction consultant Mace;
Paul Morrell, a partner at quantity surveyor Davis Langdon; and Sir Andrew Turnbull, the cabinet secretary.
In May the Major Contractors Group and CABE started talks about measures to reduce design costs in PFI contracts, with the idea of coming up with an alternative process.
Last month the RIBA put the PFI at the top of its agenda by hosting a seminar attended by 40 industry members. Proposals from it will be presented to the government after consultation with the industry.