Trowers & Hamlins

Sign up

Home » Resources » Blog » Contractors sign up to collaborative working with public bodies on PFI / PPP projects

Contractors sign up to collaborative working with public bodies on PFI / PPP projects
Trowers Public Insight

Contractors sign up to collaborative working with public bodies on PFI / PPP projects

HM Treasury for the last few years has been encouraging the public sector to focus on making cost savings from their existing PFI and PPP contracts.

As a part of this initiative, HM Treasury published the Code of Conduct for Operational PFI/PPP Contracts in June 2013.  A year on from launch, it was re-issued on 23 June with almost fourfold increase in the total number of signatories.

Background to the Code of Conduct for Operational PFI/PPP Contracts

The Code of Conduct sets out the best practice on which the public bodies and their project partners voluntarily agree to identify and make efficiencies and savings in operational contracts.  For example, it promotes collaborative working between the parties, such as providing a single local point of contact for all parties on each project.  The Code also contains commitments to achieve transparency, such as updating partner parties on a day-to-day basis on costs and where appropriate, any changes in ownership structures.

The Code of Conduct applies to all on-going PPPs that signatories are parties to, including PFIs, PF2 and other variations of PPP contracts.  It is not legally binding.  However, parties signing up to the Code automatically commit themselves to work collaboratively with each other, under the principles of the Code, to deliver efficiencies and cost savings.

There are 8 principles the Code requires both the private and public sector to adhere to, which can be summarised as follows:

  • Providing a single point of contact
  • Engaging constructively in a timely manner
  • Regular meetings with contract managers
  • Engage pro-actively for developing joint strategies
  • Engage responsively when considering the type and price of variations, waivers, changes or approvals
  • Informing any changes to project risk capital and ownership structures
  • Facilitating a clear understanding of the project between everyone involved



The key 8 principles to the Code have not changed.  What has changed significantly is the numbers of parties that have committed themselves to the Code.

When the Code was first launched it had just over 50 signatories.  There are now around 180 signatories, including various public sector bodies and well known private sector contractors such as MITIE Group, Pinnacle Regeneration Group, Serco and so on.  This manifests a stronger willingness and need from public sector bodies and their PFI partners to work together to deliver efficiencies and acceptance of this approach from the market.

Impact on public bodies

The extension of the Code is a positive step for public bodies and new PPP / PFI contracts will now be captured by its commitments.  The revised and extended Code provides another tool and guide for public bodies to collaboratively manage with Contractors in both the day-to-day management of PFI / PPP contracts and for scenarios where public bodies are seeking to implement savings initiatives by varying the scope of contracts.   

However it is a non-binding code and the management of operational PFI / PPP contracts by public bodies is still key to the efficient and cost effective delivery of services.  Whilst it can be difficult to find sufficient resource for this work in times of austerity, investment in this management in our experience leads to improved service delivery and cost savings, or, an improved ability to apply contractual remedies if levels of performance are not as expected.

A full text of the code and full list of signatories can be found on HM Treasury website at: