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PFI Case Study: Regional Police HQ

PFI Case Study: Regional Police HQ. Thursday 27 th October 2005. Picture of the past. To a Vision of the future. Why ?. Police Authority review of costs and efficiency Problems of particular Regional HQ Construction Location Adaptability to modern policing requirements

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PFI Case Study: Regional Police HQ

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  1. PFI Case Study: Regional Police HQ Thursday 27th October 2005

  2. Picture of the past

  3. To a Vision of the future

  4. Why ? • Police Authority review of costs and efficiency • Problems of particular Regional HQ • Construction • Location • Adaptability to modern policing requirements • Holding cells

  5. Issues for Consideration • Reducing costs and better introduction of planned maintenance • Location • New requirements for Police Operations • Comparison with traditional procurement

  6. Options for Procurement: • Refurbishment – traditional contract • Design & Build – new build • PFI – new build + risk apportionment + FM

  7. Aims and Objectives of Police Authority • Spread costs over the term • Private sector expertise for innovation • Private sector expertise for cost control • Transfer of risk for cost & programme • Maintain the building efficiently & economically

  8. Traditional Government procurement Payment profile can be depicted as follows: Cost Overruns Estimated Capital Cost Time Overruns Running Cost Overruns Estimated Running Cost 10 15 20 Years 5 Construction phase Operation and Maintenance phase Traditional Procurement

  9. PPP procurement Payment profile for the public sector Payment based on usage No payment until facilities ready Payment based on availability 10 15 20 Years 5 Construction phase Operation phase Public Private Partnerships

  10. PFI selected because: • Appropriate risk transfer • Use of Output Specifications • Integrated Design, Build and Operations • Benefits of whole-life costing • Linking management with performance initiatives • Maximising scope for innovation

  11. New Facility

  12. New Facility £10m capital cost with PFI contract over 30 years worth £95 million. It contains: • Custody Suite • Victims of Crime Suite • Traffic Police Suite

  13. New Facility • Rapid Response Team • Anti Drug Squad • Scenes of crime • Rapid response Team • ID Parole • C.I.D. detectives

  14. New Facility • First Floor • Coroners Office • County Court Admin and Process • Conference Facilities • Major Incident room

  15. New Facility

  16. New Facility

  17. Procurement Process • Clear output specification • Performance criteria • Realistic risk transfer • Public sector value for money comparator • Proposed contract • Project timetable

  18. Integration of service Private sector design Incentive to perform needs solutions payments linked to responsibility transferred performance fit for purpose to private sector Incentive to deliver Output specification Value for to time and cost clarity in definition of services money responsibility transferred to be provided to private sector Better allocation Long-term government Financial efficiency of risks cash flow low coverage ratios risks to those best private sector long maturities able to manage them performance risk Achieving Value for Money

  19. Appointing Advisors • Understanding of requirements • Benefit of Lead Advisor Role • Consistency of team • Familiarity of Advisory bodies • Value for Money

  20. Conclusion • Successful way of procuring facilities for the Police Authority • Authorities need to predict what their requirements will be for the next 20-30 years • Delivery of more & better Police Authority services

  21. Thank You

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