Claire Phillips Project Director Partnerships UK 30 November 2004 Scottish Executive Lessons Learned from KSR

Recap on Purpose of KSR It is a self-assessment: Pre-ITN; readiness to go to market. Pre-PB appointment; is there sufficient cost and commercial certainty to proceed? Pre- financial close; provision and resourcing of monitoring and management arrangements for the lifetime of the project.

Who completes the submission? Is it really a self-assessment, does the Council know and understand what is in the submission? Maximising value from the process. Reflection.

Pre-ITN: Common Findings Unresolved land and planning issues ! Site issues (environmental, geo-technical, topographical, archaeological) Clarity of scope Clarity on affordability Statutory consultations Inconsistency in ITN documents (typically service spec and RDS)

Q. What has caused the greatest problems for projects at ITN? A. Affordability on receipt of bids

Pre-PB: Common Findings Pressures from the political climate, and the original timetable, can suggest illogical decisions. Unresolved commercial matters (can only lead to upward price movement.) PB appointment letter must be as comprehensive as possible.

Q. What has caused the greatest problems for projects once PB is announced? A. Affordability, caused by programme slippage, scope change, and unresolved commercial issues pushing costs upwards.

Any questions on KSR 1 and 2? QUESTIONS?

KSR 3 Long Term Management and Monitoring of PPP contracts.

Why have another KSR? To be helpful! To support in-house teams in their broader corporate context. To give reassurance at a national and local level that investment will be well managed. To put a structure in place for accessing information; useful in the future to the public sector.

Key Components of KSR 3 1.Who will manage and monitor the PPP contract, construction and operational phases? 2.How will monitoring be structured? 3.Ongoing awareness of stakeholders? 4.The Authority’s obligations? 5.Monitoring generally? 6.Longer term monitoring? 7.Feedback?

Who will manage and monitor? Importance of continuity Recognition of two distinct phases, construction and operation Forward planning of roles and responsibilities Access to budgets Possible external advisory support

Monitoring structure, and cascading awareness Basic project management Early intervention in any problems Ensuring all relevant parties have a voice, and can be heard. Does your preferred bidder know what the monitoring plans are?

Authority Obligations Clarity on what the Authority is required to do contractually, for example; –Process invoices within set timescale –Design development turnaround –Shared operational responsibilities –And so on.

General Monitoring For example: Adjustments to UC: performance deductions, pension contributions, indexation etc Assurance of H&S certification User satisfaction or post-occupancy evaluation Insurance benchmarking Disaster management planning And so on.

Longer Term Monitoring Has the project delivered its strategic project objectives? Refinancing Change or restructuring BV information And so on.

Process Advance notice– four weeks When – submitted no later than one week before financial close (but could be earlier) Who – Submitted to SE FPU Feedback – Welcomed. The KSR process is regarded as dynamic, it should be meaningful, and it should reflect real and current issues.

Current Status KSR 3 in draft Input from Councils with operational projects is already built in. KSR 3 has been piloted Roll-out.

Questions?