The Treasury last week announced a plan to deliver at least £1.5bn of savings across the 495 operational Private Finance Initiative (PFI) projects in England.
Savings “fully recycled”
Treasury commercial secretary Lord Sassoon said the savings could be fully recycled back into frontline services by the contracting authority.
The plans follow pilot projects at the Queen’s Hospital in Romford and two Ministry of Defence pilots, at Corsham and the Welbeck Defence Sixth Form College, which have confirmed savings opportunities of around 5% of annual payments.
Cabinet Office minister Francis Maude’s Efficiency and Reform Group will now lead a programme to secure the savings across public sector projects.
These will be made through effective contract management, making efficient use of space and reviewing soft service requirements.
The Department for Education has also unveiled its replacement for the Building Schools for the Future (BSF) programme.
The new procurement programme for privately financed schools will be known as the Priority School Building Programme and lessons from the savings pilots will be factored in.
Education secretary Michael Gove said the £2bn construction programme will be open to up to 300 schools previously promised funding under the BSF programme.