• Home
  • Our Team
  • Useful links
  • Blog
  • Contact
P2G LLP

PFI Code of Conduct - Progress?

2/6/2014

0 Comments

 
On the 14th June 2013, HM Treasury published its Code of Conduct for Operational PFI / PPP contracts with the intent of driving better behaviours, particularly amongst PFI providers, in support of its aim of making savings.

It is fair to say that the Code of Conduct’s reception has been lukewarm. It has been variously described as “a modest attempt to influence behaviour” and as “toothless”. It’s basic commitments include each party:


  • agreeing a single point of contact for each project;
  • engaging in a constructive and timely manner;  
  • meeting on a regular basis to discuss savings and operational efficiencies; and
  • working together to identify operational improvements and develop joint strategies.  

In addition, the private sector must not unreasonably refuse consent to variations suggested by the public sector and must provide clear and transparent information regarding a project’s consumables, energy and utility usage and costs. In return, the public sector must give reasonable and prompt consideration to any efficiency opportunities identified by the private  sector.

Despite the mixed views, almost one year on from the Code of Conduct’s release, we examine the uptake.

To date, there have been 159 signatories to the Code. They are made up as follows:

Picture
Unsurprisingly, the largest percentage of signatories are the public sector themselves. It would, after all, be difficult to lecture the private sector if you haven’t signed up yourself.

Turning to the main private sector investors / sponsors, there are currently 40 signatories. The HMT Current Projects List (last updated in March 2012) lists over 130 different investors in the UK’s PFI projects; meaning that almost 70% of the investors have yet to sign up. Is it not time for a complete name and shame list? A few well known names, who are notable by their absence, are:

3i Group Plc
Babcock International Group Plc
BAE Systems Plc
Biffa
BT Plc
Dalmore Capital Limited
E.ON
FCC Construction
G4S Plc (other than in respect of one project)
Lend Lease Investment Management
Lend Lease PFI/PPP Infrastructure Fund
Macquarie
Morgan Sindall Group Plc
Veolia

The next group of signatories are the funding institutions and monolines who provide the majority of the debt or bond finance and, importantly, can often either block savings measures from being implemented completely, or seek to charge disproportionate fee levels for agreeing to them.

The HMT Current Projects List does not list funders on projects (perhaps it should) but notable absentees include:

Ambac
Assured Guaranty Municipal
AXA Group
Bayern LB
Commerzebank
European Investment Bank
Financial Guaranty Insurance Company (FGIC)
Heleba Landesbank
Municipal Bond Insurance Association (MBIA)
Prudential

Finally, there are currently 717 operational PFI contracts covered by the Code of Conduct, each one with a separate project company. Yet only 28 of these have signed up, a miserly 4%. Well done to those who have.

From the above figures, it is clear that there is a long way to go to have a private sector that is committed to the Code of Conduct. And yet many of the companies and institutions who have not signed up continue to benefit from new contracts with UK plc. Is this the right message to send?

0 Comments



Leave a Reply.

    Authors

    The authors have experience of more than 100 PFI projects in multiple sectors.

    Archives

    April 2020
    March 2020
    October 2019
    September 2019
    June 2019
    March 2019
    May 2018
    June 2017
    October 2015
    July 2015
    June 2015
    April 2015
    March 2015
    February 2015
    January 2015
    October 2014
    August 2014
    July 2014
    June 2014
    May 2014
    October 2013
    July 2013
    June 2013
    May 2013

    Categories

    All
    Charitable Donation
    Code Of Conduct
    Contracts
    Covid 19
    Covid-19
    Damage
    Honesty
    Insurance
    Monthly Reports
    News
    PF2
    Pfi
    PPM
    Profit
    Public Sector
    Relationships
    Savings
    Secondary Market
    Special Purpose Companies
    Vacancy

    RSS Feed

P2G LLP
A Social Enterprise Partnership
Registered in England & Wales
No. OC375527
​P2G Contract Support LLP
Registered in England & Wales
No. OC419519