PF2 - Revision history

Editor at 17:06, 15 January 2021

2021-01-15T17:06:53Z

← Older revision		Revision as of 17:06, 15 January 2021
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	* Complex project.		* Complex project.
	* Crown build.		* Crown build.
		+	* Crown Commercial Service CCS.
	* Government Construction Strategy.		* Government Construction Strategy.
	* House of Commons, Treasury - Seventeenth Report: Private Finance Initiative.		* House of Commons, Treasury - Seventeenth Report: Private Finance Initiative.

Designing Buildings at 12:27, 1 October 2020

2020-10-01T12:27:50Z

← Older revision		Revision as of 12:27, 1 October 2020
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	* 2011 [http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/114602.htm House of Commons Treasury Select Committee report].		* 2011 [http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/114602.htm House of Commons Treasury Select Committee report].

−	[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Property_development]] [[Category:Public_procedures]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:DCN_News]] [[Category:DCN_Policy]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Property_development]] [[Category:Public_procedures]]

Designing Buildings at 16:02, 10 December 2019

2019-12-10T16:02:50Z

← Older revision		Revision as of 16:02, 10 December 2019
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	Ref [https://www.gov.uk/government/speeches/budget-2018-philip-hammonds-speech https://www.gov.uk/government/speeches/budget-2018-philip-hammonds-speech]		Ref [https://www.gov.uk/government/speeches/budget-2018-philip-hammonds-speech https://www.gov.uk/government/speeches/budget-2018-philip-hammonds-speech]
−
−	~~= Find out more =~~

	For step by step guidance on public projects, see: Public project: outline work plan.		For step by step guidance on public projects, see: Public project: outline work plan.

−	=== Related articles on Designing Buildings Wiki ===	+	= Related articles on Designing Buildings Wiki =

	* Complex project.		* Complex project.
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	* Public procurement.		* Public procurement.

−	=== External references ===	+	= External references =

	* HT Treasury: [http://www.hm-treasury.gov.uk/infrastructure_pfireform.htm Private Finance 2 (PF2)].		* HT Treasury: [http://www.hm-treasury.gov.uk/infrastructure_pfireform.htm Private Finance 2 (PF2)].
	* HT Treasury: [http://webarchive.nationalarchives.gov.uk/20130129110402/http://www.hm-treasury.gov.uk/d/infrastructure_new_approach_to_public_private_parnerships_051212.pdf A new approach to public private partnerships.]		* HT Treasury: [http://webarchive.nationalarchives.gov.uk/20130129110402/http://www.hm-treasury.gov.uk/d/infrastructure_new_approach_to_public_private_parnerships_051212.pdf A new approach to public private partnerships.]
−	* ~~[http://cdn.hm-treasury.gov.uk/infrastructure_standardisation_of_contracts_051212.pdf~~ Standardisation of PF2 Contracts - HM Treasury].	+	* Standardisation of PF2 Contracts - HM Treasury.
	* 2011 [http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/114602.htm House of Commons Treasury Select Committee report].		* 2011 [http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/114602.htm House of Commons Treasury Select Committee report].

	[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Property_development]] [[Category:Public_procedures]]		[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Property_development]] [[Category:Public_procedures]]

Editor at 18:05, 25 January 2019

2019-01-25T18:05:10Z

← Older revision		Revision as of 18:05, 25 January 2019
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	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===

		+	* Complex project.
	* Crown build.		* Crown build.
	* Government Construction Strategy.		* Government Construction Strategy.

Designing Buildings at 11:21, 30 October 2018

2018-10-30T11:21:34Z

← Older revision		Revision as of 11:21, 30 October 2018
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	Addressing the House of Commons, Hammond said: "I'm committed to PPP where it delivers value to the taxpayer and shifts risk to the private sector. There is compelling evidence that PFI does neither." While the government will, he said, honour existing contracts, there "will be no pushover" in their management.		Addressing the House of Commons, Hammond said: "I'm committed to PPP where it delivers value to the taxpayer and shifts risk to the private sector. There is compelling evidence that PFI does neither." While the government will, he said, honour existing contracts, there "will be no pushover" in their management.
		+
		+	"I have never signed off a PFI contract as Chancellor…and I can confirm today that I never will. I can announce that the Government will abolish the use of PFI and PF2 for future projects."
		+
		+	Ref [https://www.gov.uk/government/speeches/budget-2018-philip-hammonds-speech https://www.gov.uk/government/speeches/budget-2018-philip-hammonds-speech]

	= Find out more =		= Find out more =

Editor at 10:28, 30 October 2018

2018-10-30T10:28:10Z

← Older revision		Revision as of 10:28, 30 October 2018
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	Charles Roxburgh, the second permanent secretary at the Treasury said; “We think there are some promising projects on the horizon – some good roads projects – but we are talking of a handful, rather than going back to the days of the 2000s, when it was up to one a week and £8bn a year… PF2 is used only if it gives us better value for money. That is a pretty high bar, particularly when there is an awful lot of other public investment going into infrastructure...”		Charles Roxburgh, the second permanent secretary at the Treasury said; “We think there are some promising projects on the horizon – some good roads projects – but we are talking of a handful, rather than going back to the days of the 2000s, when it was up to one a week and £8bn a year… PF2 is used only if it gives us better value for money. That is a pretty high bar, particularly when there is an awful lot of other public investment going into infrastructure...”

−	Ref [http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/private-finance-initiatives/oral/81067.html http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/private-finance-initiatives/oral/81067.html]	+	(Ref. [http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/private-finance-initiatives/oral/81067.html http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/private-finance-initiatives/oral/81067.html)]
		+
		+	In the 2018 Autumn Budget, Chancellor Philip Hammond confirmed that the government would be scrapping both PF2 and PFI contracts, with no more being signed.
		+
		+	Addressing the House of Commons, Hammond said: "I'm committed to PPP where it delivers value to the taxpayer and shifts risk to the private sector. There is compelling evidence that PFI does neither." While the government will, he said, honour existing contracts, there "will be no pushover" in their management.

	= Find out more =		= Find out more =

217.118.93.144 at 04:47, 17 September 2018

2018-09-17T04:47:53Z

← Older revision		Revision as of 04:47, 17 September 2018
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	Charles Roxburgh, the second permanent secretary at the Treasury said; “We think there are some promising projects on the horizon – some good roads projects – but we are talking of a handful, rather than going back to the days of the 2000s, when it was up to one a week and £8bn a year… PF2 is used only if it gives us better value for money. That is a pretty high bar, particularly when there is an awful lot of other public investment going into infrastructure...”		Charles Roxburgh, the second permanent secretary at the Treasury said; “We think there are some promising projects on the horizon – some good roads projects – but we are talking of a handful, rather than going back to the days of the 2000s, when it was up to one a week and £8bn a year… PF2 is used only if it gives us better value for money. That is a pretty high bar, particularly when there is an awful lot of other public investment going into infrastructure...”

−	Ref http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/private-finance-initiatives/oral/81067.html	+	Ref [http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/private-finance-initiatives/oral/81067.html http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/private-finance-initiatives/oral/81067.html]

	= Find out more =		= Find out more =

Designing Buildings at 14:50, 11 May 2018

2018-05-11T14:50:34Z

← Older revision		Revision as of 14:50, 11 May 2018
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	= Introduction =		= Introduction =

−	Private Finance Initiatives (PFI) are ~~the most common~~ form of Public Private Partnerships (PPP), one of the ~~three~~ procurement routes preferred by the Government Construction Strategy for central civil government projects. Generally PFI is only suitable for large-scale projects such as infrastructure projects, hospitals and schools.	+	Private Finance Initiatives (PFI) are a form of Public Private Partnerships (PPP), one of the procurement routes preferred by the Government Construction Strategy for central civil government projects. Generally PFI is only suitable for large-scale projects such as infrastructure projects, hospitals and schools.

	On PFI projects, a single integrated supply team is appointed with design, construction and facilities management expertise to design, build and operate a development for a period of time. A special purpose vehicle (SPV), of which the integrated supply team is a part, finances the project and leases it to the government for an agreed period (perhaps 30 years) after which the development reverts to government ownership.		On PFI projects, a single integrated supply team is appointed with design, construction and facilities management expertise to design, build and operate a development for a period of time. A special purpose vehicle (SPV), of which the integrated supply team is a part, finances the project and leases it to the government for an agreed period (perhaps 30 years) after which the development reverts to government ownership.
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	* The government will retain certain risks, and take a more appropriate share of others (such as insurances and the risk of changes to the law).		* The government will retain certain risks, and take a more appropriate share of others (such as insurances and the risk of changes to the law).

−	Broadly, these changes to PFI ~~have been~~ welcomed. The standardisation of procurement, and the shortening of the tender period ~~are~~ seen as positive, cost-cutting changes, and it is generally accepted that it is sensible to remove some long-term soft services from PFI contracts. However, there ~~are~~ concerns that changes to the financing of projects ~~may~~ in fact increase costs, in particular, changes to the debt to equity ratio, and the need for bidders to factor in an element of government equity.	+	Broadly, these changes to PFI were welcomed. The standardisation of procurement, and the shortening of the tender period were seen as positive, cost-cutting changes, and it was generally accepted that it was sensible to remove some long-term soft services from PFI contracts. However, there were concerns that changes to the financing of projects could in fact increase costs, in particular, changes to the debt to equity ratio, and the need for bidders to factor in an element of government equity.

−	PF2 ~~will be~~ piloted on the £1.75bn Priority Schools Building Programme (PSBP) as well as some defence projects and a new hospital project.	+	PF2 was piloted on the £1.75bn Priority Schools Building Programme (PSBP) as well as some defence projects and a new hospital project.
		+
		+	= Decline in use =
		+
		+	Oral evidence given to the House of Commons Public Accounts Committee (PAC) on 28 May 2018 revealed that only 12 projects had been brought forward under PF2 in the past five and a half years and that the last PF2 scheme agreed by the government was in April 2016.
		+
		+	Charles Roxburgh, the second permanent secretary at the Treasury said; “We think there are some promising projects on the horizon – some good roads projects – but we are talking of a handful, rather than going back to the days of the 2000s, when it was up to one a week and £8bn a year… PF2 is used only if it gives us better value for money. That is a pretty high bar, particularly when there is an awful lot of other public investment going into infrastructure...”
		+
		+	Ref http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/private-finance-initiatives/oral/81067.html

	= Find out more =		= Find out more =

Designing Buildings at 13:07, 11 July 2016

2016-07-11T13:07:29Z

← Older revision		Revision as of 13:07, 11 July 2016
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−
	= Introduction =		= Introduction =

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	= Changes to PFI =		= Changes to PFI =

−	The government initiated a review of PFI in 2011, and on the 5th December 2012, published details of a new approach, stating that it ~~‘…remains~~ committed to private sector involvement in delivering infrastructure and services, but has recognised the need to address the widespread ~~concerns…’~~	+	The government initiated a review of PFI in 2011, and on the 5th December 2012, published details of a new approach, stating that it '…remains committed to private sector involvement in delivering infrastructure and services, but has recognised the need to address the widespread concerns…'

	The new version of PFI is referred to as PF2, and the key changes are set out below:		The new version of PFI is referred to as PF2, and the key changes are set out below:

	== Financing ==		== Financing ==
−	*The government will look to become a minority equity investor (probably around 30%) in PF2 projects, to ensure better alignment of objectives and greater transparency. To avoid potential conflicts of interest, this investment will be managed by a unit in the Treasury, separate from the procuring authority.	+
−	*The amount of private sector equity relative to debt will be increased from 90/10 to 80/20 or 75/25.	+	* The government will look to become a minority equity investor (probably around 30%) in PF2 projects, to ensure better alignment of objectives and greater transparency. To avoid potential conflicts of interest, this investment will be managed by a unit in the Treasury, separate from the procuring authority.
−	*PF2 Bidders will be required to develop a long-term financing solution that may include public and private bonds, commercial bank debt and multilateral debt products, but bank debt should not provide the majority of the financing.	+	* The amount of private sector equity relative to debt will be increased from 90/10 to 80/20 or 75/25.
−	*Funding competitions will be introduced for a proportion of the private sector equity.	+	* PF2 Bidders will be required to develop a long-term financing solution that may include public and private bonds, commercial bank debt and multilateral debt products, but bank debt should not provide the majority of the financing.
−	*A control total will be introduced into government accounts for off-balance sheet PF2 contracts.	+	* Funding competitions will be introduced for a proportion of the private sector equity.
−	*An open-book approach will be introduced, with a gain share mechanism for surplus lifecycle funds.	+	* A control total will be introduced into government accounts for off-balance sheet PF2 contracts.
−	*Actual and forecast equity return information will be required for publication.	+	* An open-book approach will be introduced, with a gain share mechanism for surplus lifecycle funds.
		+	* Actual and forecast equity return information will be required for publication.

	== Procurement ==		== Procurement ==
−	*Some centralisation of procurement will be introduced, and there will be additional Treasury checks as part of the business case approval process.	+
−	*The tender process will be standardised, and the time taken from tender to appointment should take no more than 18 months. Bidders may be reimburses their bidding costs if projects are cancelled for exceeding the 18-month deadline.	+	* Some centralisation of procurement will be introduced, and there will be additional Treasury checks as part of the business case approval process.
−	*A suite of standard documentation will be created, including:	+	* The tender process will be standardised, and the time taken from tender to appointment should take no more than 18 months. Bidders may be reimburses their bidding costs if projects are cancelled for exceeding the 18-month deadline.
−	#Procurement and contract guidance.	+	* A suite of standard documentation will be created, including:
−	#A ~~shareholders’~~ agreement.	+
−	#A facilities management service output specification.	+	# Procurement and contract guidance.
−	#A payment mechanism for accommodation projects.	+	# A shareholders' agreement.
		+	# A facilities management service output specification.
		+	# A payment mechanism for accommodation projects.

	== Risk ==		== Risk ==
−	*Contracts will no longer include 'soft' services, such as cleaning, catering and perhaps some aspects of maintenance.	+
−	*The government will retain certain risks, and take a more appropriate share of others (such as insurances and the risk of changes to the law).	+	* Contracts will no longer include 'soft' services, such as cleaning, catering and perhaps some aspects of maintenance.
		+	* The government will retain certain risks, and take a more appropriate share of others (such as insurances and the risk of changes to the law).

	Broadly, these changes to PFI have been welcomed. The standardisation of procurement, and the shortening of the tender period are seen as positive, cost-cutting changes, and it is generally accepted that it is sensible to remove some long-term soft services from PFI contracts. However, there are concerns that changes to the financing of projects may in fact increase costs, in particular, changes to the debt to equity ratio, and the need for bidders to factor in an element of government equity.		Broadly, these changes to PFI have been welcomed. The standardisation of procurement, and the shortening of the tender period are seen as positive, cost-cutting changes, and it is generally accepted that it is sensible to remove some long-term soft services from PFI contracts. However, there are concerns that changes to the financing of projects may in fact increase costs, in particular, changes to the debt to equity ratio, and the need for bidders to factor in an element of government equity.
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	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*Crown build.	+
−	*Government Construction Strategy.	+	* Crown build.
−	*House of Commons, Treasury - Seventeenth Report: Private Finance Initiative.	+	* Government Construction Strategy.
−	*Major Projects Authority.	+	* House of Commons, Treasury - Seventeenth Report: Private Finance Initiative.
−	*Private developer scheme.	+	* Major Projects Authority.
−	*Private Finance Initiative	+	* Private developer scheme.
−	*Public Private Partnership.	+	* Private Finance Initiative
−	*Public procurement.	+	* Public Private Partnership.
		+	* Public procurement.

	=== External references ===		=== External references ===
−	*HT Treasury: [http://www.hm-treasury.gov.uk/infrastructure_pfireform.htm Private Finance 2 (PF2)].
−	*HT Treasury: [http://webarchive.nationalarchives.gov.uk/20130129110402/http://www.hm-treasury.gov.uk/d/infrastructure_new_approach_to_public_private_parnerships_051212.pdf A new approach to public private partnerships.]
−	*[http://cdn.hm-treasury.gov.uk/infrastructure_standardisation_of_contracts_051212.pdf Standardisation of PF2 Contracts - HM Treasury].
−	*2011 [http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/114602.htm House of Commons Treasury Select Committee report].

−	[[Category:Contracts_/_payment]]	+	* HT Treasury: [http://www.hm-treasury.gov.uk/infrastructure_pfireform.htm Private Finance 2 (PF2)].
−	[[Category:Cost_/_business_planning]]	+	* HT Treasury: [http://webarchive.nationalarchives.gov.uk/20130129110402/http://www.hm-treasury.gov.uk/d/infrastructure_new_approach_to_public_private_parnerships_051212.pdf A new approach to public private partnerships.]
−	[[Category:Procurement]]	+	* [http://cdn.hm-treasury.gov.uk/infrastructure_standardisation_of_contracts_051212.pdf Standardisation of PF2 Contracts - HM Treasury].
−	[[Category:Public_procedures]]	+	* 2011 [http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/114602.htm House of Commons Treasury Select Committee report].
		+
		+	[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Property_development]] [[Category:Public_procedures]]

Mustafa Pasha at 15:41, 15 January 2015

2015-01-15T15:41:15Z

← Older revision		Revision as of 15:41, 15 January 2015
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	=== External references ===		=== External references ===
	*HT Treasury: [http://www.hm-treasury.gov.uk/infrastructure_pfireform.htm Private Finance 2 (PF2)].		*HT Treasury: [http://www.hm-treasury.gov.uk/infrastructure_pfireform.htm Private Finance 2 (PF2)].
−	*HT Treasury: [http://www.hm-treasury.gov.uk/d/infrastructure_new_approach_to_public_private_parnerships_051212.pdf A new approach to public private partnerships.]	+	*HT Treasury: [http://webarchive.nationalarchives.gov.uk/20130129110402/http://www.hm-treasury.gov.uk/d/infrastructure_new_approach_to_public_private_parnerships_051212.pdf A new approach to public private partnerships.]
	*[http://cdn.hm-treasury.gov.uk/infrastructure_standardisation_of_contracts_051212.pdf Standardisation of PF2 Contracts - HM Treasury].		*[http://cdn.hm-treasury.gov.uk/infrastructure_standardisation_of_contracts_051212.pdf Standardisation of PF2 Contracts - HM Treasury].
	*2011 [http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/114602.htm House of Commons Treasury Select Committee report].		*2011 [http://www.publications.parliament.uk/pa/cm201012/cmselect/cmtreasy/1146/114602.htm House of Commons Treasury Select Committee report].