The Private Finance Initiative: Electronic Libraries for Northern Ireland

Today, John Dowdall CB, Comptroller and Auditor General for Northern Ireland, published his report into the delivery, through the Private Finance Initiative, of the Electronic Libraries for Northern Ireland (ELFNI) IT system.

The ELFNI system is intended to enhance access and quality of service through linking Northern Ireland’s 113 branch libraries and 47 mobile libraries via a network of 1200 personal computers. These provide all public libraries with equal access to automated facilities and the Internet and access for the general public to e-Government services. The contract, which is worth £36m, covers a ten-year period which commenced in May 2002.

Overall, the Audit Office found that the procedures leading to the award and implementation of the contract for the ELFNI project were well handled. However, whether ELFNI will provide value for money to the taxpayer, the Audit Office considers that this will only become apparent in the longer term through assessing the use made of the system and reviewing its success in meeting the wider needs of government.

On specific aspects of the project the Audit Office found that:

  • the project board established to update and modernise library services had been thorough in its planning. However, costs increased considerably as a result of changes to the project’s strategic objectives, to reflect the Government’s evolving vision for transforming the Library Service by making it a key component of its plan for life-long learning – the “People’s Network” (paragraphs 1.1 to 1.15);
  • the procurement process was thorough and was aided by the assembly of a properly qualified team and the appointment, as project manager of an external consultant with previous PFI experience. Financial consultants were also appointed but there were flaws in the appointment process which limited competition and may have impacted on value for money (paragraphs 2.1 to 2.6). the project board established the conditions for a successful competition. In addition, its adoption of the Gateway Review process, at a time when this was not compulsory, provided assurance that the project continued to be worthwhile; it also highlighted a significant potential risk to the project which required the much speedier development of contingency planning arrangements (paragraphs 2.7 to 2.16).
  • a good range of solutions had been put forward for what was an innovative project. These were subject to a rigorous technical evaluation process which resulted in the best available deal being selected. As a result, the Audit Office understands that the project is the first in the United Kingdom to share, between library authorities, a single network infrastructure and a single Library Management System across all areas of business (paragraphs 3.1 to 3.10).
  • while the signed contract reflects the deal that was negotiated and provides incentives for both parties, the arrangements for sharing any excess profits which may arise appear to be weighted in favour of the contractor. However, whether these will ever have to be applied depends on how quickly other sources of income can be brought on line and how successful they are (paragraphs 4.1 to 4.21).

Notes for editors

  • Since its launch in November 1992, the Private Finance Initiative (PFI) has become one of the main methods by which the public sector procures services from the private sector. Its underlying objective is to use the best of both public and private sector skills to improve public services. In particular, this means the use by the public sector of capital assets owned and managed by the private sector.
  • In Northern Ireland the Department of Culture, Arts and Leisure (DCAL) has overall responsibility for the public library service. At an operational level five Education and Library Boards, each serving a distinctive geographical area, fulfil the role of education authority and library authority in their respective areas.
  • The Gateway review process is a review of an acquisition programme or procurement project carried out at a key decision point by a team of experienced people, independent of the project team. Best practice involves five reviews during the lifecycle of a project; three before contract award and two looking at service implementation and confirmation of operational benefits. The process became mandatory in Northern Ireland for all major capital investment projects from February 2003.