PFI changes to be put out to tender

Alterations valued at £100,000 on Department of Health PFI projects will be put out for competitive tendering under new rules to be announced later this month.

The rules, to be published imminently as guidance, are the latest move to slash the increasing cost of alterations on schemes in the wake of a critical National Audit Office report into the value for money that clients receive.

They follow last month’s revelation that changes to the Building Schools for the Future programme could lead to PFI contractors being forced to hand work to rivals if they fail to agree prices for alterations with clients.

The DoH guidance goes further than this by saying all alterations of £100,000 or above should automatically be put out to competitive tendering without consultation “to ensure that they can demonstrate value for money”.

The guidance calls for the “robust management of the variations process” of schemes after they are completed to ensure that costs levied by the PFI consortiums are monitored.

It also says NHS trusts should consider “a moratorium on variations for a fixed period after moving into new facilities”, which it says will allow trusts and PFI consortium staff time to adjust to the new premises and “new ways of working”.

A DoH spokesperson said that after the National Audit Office report, the department accepted that “there have been problems with high fees and the pricing of especially minor changes at some NHS schemes”.

The spokesperson added: “The DoH has been working with trusts to learn lessons and develop new guidance. It has the agreement of the private sector.”

The guidance represents what one insider described as a new “get tough” attitude within the Treasury on spiralling PFI costs, and a determination by government to ensure value for money amid a tightening of public sector purse strings.