1. abcdefghij Financial Partnerships Unit Key Stage Review 3 Claire Phillips Assistant Director, Partnerships UK

2. Key Stage Review 3 Long Term Management and Monitoring of PPP Contracts Claire Phillips Scottish Executive PPP Industry Day 3 June 2004

3. Today KSR Context KSR Purpose KSR 3 Key Components –Who –How –Council Obligations –General monitoring –Longer term monitoring Process

4. KSR 3 - Context KSR 1 – Pre-ITN KSR 2 – Pre-PB KSR 3 – Pre-Financial Close

5. KSR Purpose Self-assessment, not an audit. Pre-ITN; help projects go to the market in good shape Pre-PB; help projects progress to PB with as much cost and commercial certainty as possible. –Maximises opportunity for smooth procurement –Good for public and private sectors

6. 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.

7. 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?

8. 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

9. 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?

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

11. 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.

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

13. 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.

14. Current Status KSR 3 in draft Input from Councils with operational projects is already built in. KSR 3 being piloted in next deal to close Roll-out.