1. Value for money is about delivering public sector policy in the most cost effective way.
   
   
2. The cost of borrowing is only one factor and although the Government can borrow more cheaply than the private sector, determining value for money is not simply about comparing interest rates.  Any additional costs of borrowing are more than offset by the private sector taking on the risk of construction cost, time overruns and project performance; using their ability to innovate; and making more efficient use of resources.
   
   
3. HM Treasury will not approve any PFI project if it does not deliver better value for money than the Public Sector Comparator.  The Public Sector Comparator is the benchmark test for Value for Money and takes into account all the costs associated with delivery of the service through its lifetime.
   
   
4. The PFI approach can deliver better value for money than conventional procurement by allocating risks to the parties best able to manage them and by imposing the disciplines of the financial markets.
   
   
5. PFI contracts are awarded by competitive tender which ensures value for money as firms compete throughout the bidding process.

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