News story

Public and private sector support cutting costs of public infrastructure with new code of conduct

On Thursday 13 June the government will launch a new ‘best practice’ guide for the private and public sector to make savings in existing contracts for schools, hospitals and many other public infrastructure projects.

The voluntary code of conduct sets out how public bodies and their private sector partners will work together to make savings from Public Private Partnership (PPP) contracts, including Private Finance Initiative (PFI) deals, the model used to procure a large proportion of public infrastructure prior to 2013.

Around 50 organisations including investors, lenders, construction contractors and facilities management providers have already signed up to the code, which is the first of its kind, with more expected.

The launch of the code is another step towards cutting the cost of infrastructure delivery and forms part of the government’s wider work on reducing the cost of PFI deals under the Operational Savings programme, which has already achieved over £1.5billion in savings since it was launched less than 2 years ago.

The contract sets out 8 key commitments for private sector parties, and equally importantly, 8 commitments for public bodies to encourage better working between the public and private sector. Pledges include having a single point of contact for all parties on a project, to ensure efficient use of time and good communication between sectors, and setting how they will proactively drive efficiency savings from the top to bottom of their organisation.

The code also contains a number of new guidelines on transparency, for instance updating partner organisations on day-to-day costs such as consumables and, when appropriate, on any changes in ownership structures.

Chief Secretary to the Treasury, Danny Alexander, said:

This government is committed to sustainable investment in schools, hospitals, prisons, fire stations and other buildings we need to deliver public services. But we have to make sure the taxpayer is getting maximum value for money, and that contracts are as efficient and transparent as possible.

The work on Operational Savings, and the code itself, are further examples of how the government is working with the private sector to drive down the cost of infrastructure in the UK so that we can invest where it’s most needed.

Commercial Secretary to the Treasury, Lord Deighton, said:

The voluntary code of conduct sets out how the public and private sector can work in real partnership towards managing our infrastructure more efficiently and at better value to the public purse.

It’s a great step in the right direction, with organisations across the delivery spectrum as well as central government departments already signed up. I hope many more commit to improving the way we run our infrastructure in the UK, to make sure we have the public buildings, networks and knowledge we need to compete in the global race.

The list of organisations signed up to the code will be updated every 2 weeks and widespread support from the market and public sector is expected.

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