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Dear Colleague
INCLUSION OF SOFT
SERVICES IN PUBLIC PRIVATE PARTNERSHIPS/PRIVATE FINANCE INITIATIVE
1. I am writing to
clarify our policy on the inclusion of so-called "soft FM services"
in Public Private Partnership (PPP)/Private Finance Initiative (PFI) schemes.
2. Health Boards
and NHS Trusts must decide whether to include or exclude soft services
in their PPP/PFI schemes before they issue the OJEC notice. Variant bids
for the potential inclusion of soft services should not be sought.
3. How soft services
should be treated in a PPP context is a matter of value for money. Health
Boards and NHS Trusts must undertake proper steps to establish, benchmark
and evaluate the cost of in-house services and use this information as
the basis of determining whether better value for money could be secured
by out-sourcing the services as part of a PPP contract.
4. There are several
reasons for this clarification of policy:
i) Health Boards
and NHS Trusts should not use the market to determine if one method
of provision is more efficient than the other. Generally speaking, the
private sector have expressed concern over the transparency and equity
of such market tests;
ii) in accordance
with NHS MEL (1998)32, the objective for managers in determining value
for money is to achieve the right quality at the right cost. Equal priority
has to be given to both quality of service and employment practices
which will deliver the appropriate quality of service;
iii) if variant
bids are sought permitting the inclusion or exclusion of soft services,
the private sector will not be able to structure its consortium until
it knows the outcome of the competitive bidding process. Soft FM providers
may be awarded on a soft FM - free basis;
iv) preparing variant
bids is expensive, and these costs will all be passed back to the NHS
in Scotland.
Yours sincerely
JOHN ALDRIDGE |
3rd October 2000
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Addressees
For action
Directors
of Finance,
Health Boards and NHS Trusts.
For information
Executive Director,
SCPMDE
General Manager,
Health Education
Board for Scotland
______________________________
Enquiries on PPP/PFI
to:
David Foreman
Directorate of Finance
Room 155
St Andrew's House
EDINBURGH
EH1 3DG
Tel: 0131-244 2786
Fax: 0131-244 2057
e-mail: d.foreman@dgri.scot.nhs.uk
Enquiries on HR issues to:
Ms Lynne Khindria
Directorate of Human Resources
Room GW.09
St Andrew's House
EDINBURGH
EH1 3DG
Tel: 0131-244 5084
Fax: 0131-244 2837
e-mail: Lynn.Khindria@scotland.gsi.gov.uk
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