HISTORIC PRESS RELEASE : Andrew Smith and Ian McCartney launch blueprint for IT Public Private Partnership Contracts [March 2000]

The press release issued by HM Treasury on 28 March 2000.

A platform for spreading best practice amongst Public Private Partnership (PPP) practitioners involved in drawing up IT contracts was announced today by Chief Secretary Andrew Smith and Cabinet Office Minister Ian McCartney.

This platform takes the form of new guidance for IT PPP deals which builds on the development and success of previous Treasury Taskforce standard contract guidance across all public services. The guidance is expected to further improve deal flow, reduce the costs of tendering and avoid the pitfalls of the past when poorly drafted contracts led to the demise of some IT projects. The guidance sets out recommendations not only for contract drafting, but also for improving the project management of IT PPP deals.

Launching the guidance, Andrew Smith said:

“This is an important step forward in ensuring that project and risk management for IT contracts is undertaken rigorously. The document emphasises the need for strong risk handling strategies and formalises the pre-contract risk review process which has been carried out to date by the Treasury Taskforce on significant projects.

“I expect the adoption of the standard approach set out in the guidance to produce substantial savings and result in greater value for money for the public sector.”

The publication of this specific guidance document for the IT Public Private Partnership sector is just one of the initiatives that the Government is currently undertaking to improve the strength of Government IT projects generally.

Ian McCartney, Minister of State at the Cabinet Office who is sponsor for the Government’s current review of the handling of major IT projects, said of the guidance:

“This Government is determined that our IT systems deliver first-class services and good value for money. Suppliers share responsibility for ensuring that projects deliver the promised service benefits and come in on time. A successful procurement process is fundamental to the success of these complex but vital projects. The guidance we are announcing today is just one part of a comprehensive package of measures to ensure that we implement systems successfully and maximise the benefits of IT to the public.”

The Taskforce IT guidance has also received the full backing of the National Audit Office (NAO), the Government spending watchdog. Assistant Auditor General, Jeremy Colman, of the National Audit Office, said:

“The new guidance perceptively reflects the key lessons learned from the first generation of PFI projects in the IT sector, many of which have been identified in our own reports. The onus is now on government departments and the IT industry to implement the guidance and improve the prospects of delivering projects to time, cost and functionality.”

The guidance sets out how to manage the procurement and contract stages of IT deals and gives advice on the handling of risk. The guidance also gives recommendations for approaching major software developments. It has been prepared after an extensive consultation process with public and private sector managers of IT projects, as well as financiers.

It is expected that the publication of the guidance will encourage more financiers to support IT PPP deals, as the document provides answers to some of the bankability problems posed to date in this sector.