Business and industry

Benchmarking and market testing the ongoing services component of PFI projects

“It is important that public officials test the cost and quality of facilities services to get value for money during the life of a PFI contract. My report highlights lessons in how value-testing should be carried out. In particular, public officials must have the necessary skills, must promote vigorous competition when value testing, and they must have a full understanding of whether and how the private sector’s price and service proposals offer value for money.”

The report recommends that the recent Treasury guidance be taken up by departments and that the Treasury should continue liaising with departments to identify suitable cost data to use in benchmarking. The NAO also urges that further steps should be taken to compare the cost and quality of facilities services under the PFI with conventional outsourcing experience.

“It is important that public officials test the cost and quality of facilities services to get value for money during the life of a PFI contract. My report highlights lessons in how value-testing should be carried out. In particular, public officials must have the necessary skills, must promote vigorous competition when value testing, and they must have a full understanding of whether and how the private sector’s price and service proposals offer value for money.”

The report recommends that the recent Treasury guidance be taken up by departments and that the Treasury should continue liaising with departments to identify suitable cost data to use in benchmarking. The NAO also urges that further steps should be taken to compare the cost and quality of facilities services under the PFI with conventional outsourcing experience.

Sir John Bourn, head of the NAO, 6 June 2007



Publication details:

ISBN: 9780102945034 [Buy from TSO]

HC: 453 2006-2007