Good Practice 00/47

Student accommodation projects – a guide to PFI contracts

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Student accommodation projects – a guide to PFI contracts

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Foreword

This guidance was prepared by Pinsent Curtis under contract to the Department for Education and Employment. It was developed from an examination of a limited number of signed Private Finance Initiative (PFI) contracts for student accommodation. The HEFCE is aware that a number of other contracts have been signed or are being negotiated under PFI or some other form of Public Private Partnership. We anticipate that we will be able to provide further advice in due course.

Student accommodation projects – a guide to PFI contracts

Contents

Foreword
Executive summary
Introduction
Approaches to procurement
Risk allocation and value for money
Property issues
Specific issues
Annex A: Relationship to Taskforce Guidance
Annex B: Related guidance
Student accommodation projects – a guide to PFI contracts

Executive summary

1. This guide is intended for Higher Education Institutions (HEIs) which are about to embark upon student accommodation projects. It focuses on procurements under the Private Finance Initiative (PFI), but other approaches are considered. It should be read in the light of the guidance set out in Annex B and, particularly, HEFCE 98/69 ‘Practical guide to PFI for higher education institutions (revised November 1998)’ and ‘Standardisation of PFI Contracts’ (Treasury Taskforce/Butterworths 1999). The latter is referred to in this guide as the ‘Taskforce Guidance’.

2. Recent experience of completed projects demonstrates that student accommodation is an area which is appropriate for PFI and other similar approaches. The purpose of this guide is to assist those undertaking similar projects. It is not intended to be prescriptive, but seeks to draw on good practice from some of the deals that have been signed already.

3. The guide starts by setting out the background to PFI and looks at the relationship between risk transfer and value for money. It then examines how a PFI project might be structured and, where a PFI approach is not feasible, considers other approaches. The next section looks in more detail at risk transfer and value for money in relation to the principal risks inherent in a student accommodation project. Following sections look at the property issues involved, and at other issues which are specific to student accommodation schemes, and which have arisen in the projects completed to date. Finally, Annex A considers the Taskforce Guidance in the context of student accommodation projects, and Annex B lists related guidance.