Communities and Local Government
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The Project Review Group
The Project Review Group (PRG) is an inter-departmental group chaired and administered by the Corporate and Private Finance Unit within HM Treasury. This has representatives from Communities and Local Government, Department for Education and Skills, Home Office, Department for Constitutional Affairs, Department of Health, Department of Culture, Media and Sport, Department of Environment, Food and Rural Affairs and the Department for Transport. In addition, PRG meetings are attended by the 4Ps (see below) representing the local authority sector, and Partnerships UK (PUK) (see below) who provide advice on PFI matters.
The role of the PRG is to give overall approval for local authority PFI projects that receive Government support. It is the gatekeeper for the delivery of PFI credit funding to local authorities. No PFI credit funding can be given to a local authority without prior PRG endorsement. In carrying out assessments of projects submitted by Departments, PRG focuses on the commercial deliverability of the project through the PFI route.
The PRG also has 3 additional functions. These are to provide:
- Early assurance to Local Authorities of the availability of funding, and the conditions attached to such funding, before they commit to the major expense of taking schemes through a PFI procurement;
- A clear indication to the private sector of the projects which will attract funding from Central Government, enabling them to focus on projects that have a good prospect of success;
- An ability to spread information about Local Authority projects in other departments so that lessons can be used to inform the development of new projects.
The sponsoring department will present projects for endorsement to the PRG in the form of their Outline Business Cases. The PRG meets regularly throughout the year - generally on a monthly basis -to discuss and "sign-off" projects which meet the published criteria, and which are considered to be sufficiently advanced to enter procurement and reach financial close without unreasonable delay.
The purpose of the PRG assessment of projects is to confirm the commercial viability of the proposals put forward. The precise form and content of the assessment will inevitably vary depending on the nature and size of the proposed scheme, as well as on the extent to which it is innovative or conversely, follows an established precedent. However considerations for assessment will be ones that could be seen as "good practice" in preparing and developing a project for the market.
As well as assessing whether to endorse all schemes to be allocated PFI Credits at OBC stage, the PRG is also introducing a second stage review of projects just before they reach the preferred bidder stage. This will focus on a selected number of projects, initially 40% of total projects receiving PFI credits, and will assess affordability and compliance with the Standardised PFI contract (SoPC 3).
