PFI deals remain over-budget and slow

12 March 2007
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12 March 2007 | Paul Snell

The cost and speed of PFI tenders still need to be improved, according to a report from the National Audit Office (NAO).

Improving the PFI tender process, published last week, found that even when budgets were set, spending was often 75 per cent more than anticipated. The average extra cost was just under £1 million.

The report also revealed that the average time for tender processes between 2004 and 2006 was 34 months. This was no quicker than the average for projects carried out between 2000 and 2003.

Many of these periods could have been "avoided or mitigated by the public sector, without risking overall value for money," said the report.

The NAO suggested a target of between 18 and 24 months would be reasonable for most PFI tenders, and that procurement departments should be made to stick to these limits.

Other recommendations were that projects should be monitored continually to identify when target times were likely to be missed. It also said that departments needed to be able to draw on staff with experience of complex procurements.


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