H.M. TREASURY NEWS RELEASE

HM Treasury News Release

118/99
14 July 1999

TREASURY TASKFORCE PFI STANDARD CONTRACT GUIDANCE LAUNCHED

A platform for generating increased Private Finance Initiative (PFI) deal flow and reducing the costs of tendering will be the outcome of new contract guidelines published by the Treasury Taskforce, Chief Secretary to the Treasury Alan Milburn said today.

The new contract guidelines will act as a blueprint for the future development of PFI and ensure that future PFI contracts across different public services will be able to follow a consistent approach by incorporating standard conditions into the contracts.

Mr Milburn said:

"Consultation with hundreds of interested parties has produced guidance which provides the public sector with a practical toolkit for delivering the very best value to the taxpayer. The guidance will avoid the pitfalls of the past - where the public sector, let alone those in the private sector, have had to re-invent the wheel at considerable expense every time a hospital or a college entered into a PFI arrangement.

"The challenge for both the public and the private sectors - now that the road is clear - is to expand the PFI. We want to see more deals done. We want to see PFI working in sectors like further education where it has not worked before. And we want to see it making an even greater contribution to producing modern public services that are shaped around the needs of the public.

"We must now use the PFI to drive forward the Government's modernisation programme for our public services. We do not want to see business as usual in our public services. We want to see change for the better. The PFI is part and parcel of that change process."

The Treasury Taskforce contract standardisation guidance marks the end of two years work involving consultation with literally hundreds of stakeholders. The contract standardisation guidance has already commanded a great deal of positive comment in the market.

NOTES TO EDITORS

1. The Taskforce guidance has also received the full backing of the National Audit Office, (NAO) the Government spending watchdog. The Comptroller and Auditor General John Bourn, head of the National Audit Office said: "In looking at future PFI deals, the NAO will take a close interest in the extent to which these standard terms have been followed and the reasons for any departures from them."

2. The British Bankers Association said "The guidance on standardisation is milestone in the development of the infrastructure underpinning the PFI market". For further information you should contact Roger Miles on 0171 216 8800.

3. The Major Contractor's Group can be contacted be telephoning Jenny Price on 0171 608 5140.

4. Enquiries about obtaining copies of the guidance should be made through Butterworths on 0171 400 2500 ext. 3072 or at www.butterworths.co.uk on the Internet. Press copies can be obtained from Malcolm Graves in the Treasury Press Office on 0171 270 5192.

5. Media enquiries should be addressed to Malcolm Graves on 0171 270 5192. Technical queries on the guidance document should be addressed to David Lee on 0171 270 4623.

6. This news release is available on the internet at http://www.hm-treasury.gov.uk and at http://www.treasury-projects-taskforce.gov.uk