Download the full outcome
Detail of outcome
The evidence gathered by this consultation has been considered in the structuring of the arrangements for PF2 public sector equity and finalisation of the Standard PF2 Equity Documents, comprising a Shareholders Agreement (‘Shareholders Agreement’ or ‘SHA’), Articles of Association and Loan Note Instrument.
These documents have now been published as finalised standard form documents for the public sector to use for their procurement of PF2 projects. On any PF2 procurement the documents will be customised by the Treasury PF2 Equity Unit in conjunction with the procuring authority to reflect project specific issues.
The Treasury received responses from a wide variety of stakeholders. This response document summarises the main issues raised by respondents under the consultation questions and outlines the government’s response to these. We are very grateful to those who took the time to respond.
The Standard PF2 Equity Documents include details of the voting arrangements, the government’s right to appoint a director to each company and increased information other shareholders will be required to disclose. The arrangements also incorporate the government’s new policy regarding tax compliance and public procurements.
The Treasury has produced the Standard PF2 Equity Documents with the intention of minimising the time and costs of dealing with standard commercial and legal issues.
As the Standard PF2 Equity Documents are not a ‘prescribed’ suite of documents, no formal derogations arrangements will apply. Interested parties can seek informal guidance from the Treasury PF2 equity unit at any time regarding proposed amendments.
The new arrangements for public sector equity will apply to all future PF2 projects. The first programme will be the privately financed element of the Priority Schools Building Programme.
Detail of feedback received
The consultation received a total of 30 written responses from businesses, industry representative groups, other interested parties and individuals. The government is grateful to all those who contributed their views during the consultation process.
The government launched its new approach to Public Private Partnerships in December 2012. As part of its reforms to the Private Finance Initiative (PFI), the government announced that it will look to act as a minority co-investor in future PF2 projects, promoting better partnerships with industry, a stronger public voice on projects and greater transparency about the performance of PF2 projects.
The government announced the privately financed element of the Priority Schools Building Programme (PSBP) would be the first to implement the reforms. Forty six schools in five batches will be rebuilt using PF2, with a total funding requirement of approximately £700 million. Procurement for the first batch of schools was launched by the Education Funding Authority in June 2013 and the remaining batches will follow over the next 12 months.
In each case the government will invest alongside the private sector into a ‘joint venture company’. Each company will be majority owned by the private sector and the government will invest on the same terms as the private sector. The publication of the draft Shareholders Agreement (Shareholders Agreement Consultation Draft’) marks another step in the reform process as this – together with other legal documentation included in the pack – sets out the proposed terms of the government’s investment. It includes details of the voting arrangements, the government’s right to appoint a director to each company and increased information other shareholders will be required to disclose to provide greater transparency to the public.
These documents will form the basis of the final legal documents to be used by public sector bodies as part of their procurement documentation when they set up PF2 contracts.
This consultation sets out the terms for public sector investment in PF2 projects and seeks views on aspects of the detail of these terms and the draft standard shareholder documents.