The UK government has taken a decision to make all construction procurement choices on the basis of whole life costs – HM Treasury guidance stipulates this specifically.
This general ruling has been crystallized in Private Finance Initiative (PFI) and Public Private Partnerships (PPP) contracting. The focus of PFI and PPP on long term risk management, and long term maintenance and operation makes comprehensive whole life costing a necessity.
Government procurement outside of PFI & PPP has an emphasis on whole life costs at all levels – including Local Authority and Housing association procurement.
Government procurement practices have had a huge influence on the construction industry as a whole, with major client organisations adopting similar policies (see our links page for examples of government procurement policy statements). This has been reinforced by the move towards partnering, which engenders longer-term strategies and risk management processes – naturally supported by whole life costing practices.