The Treasury has unveiled a voluntary Code of Conduct for Public Private Partnerships (PPPs) designed to ‘fundamentally change' the way costs are reduced from the legacy of expensive Private Finance Initiative (PFI) contracts, officials said.

Around 50 organisations including the DCLG and the Department for Transport have already signed up to the new Code, which covers all Public Private Partnership (PPP) contracts.

PFI deals were the model used to procure a large proportion of public infrastructure since the early 90s, including transport projects, and have been heavily criticised for running up huge costs for public organisations.

Chief secretary to the Treasury, Danny Alexander, said the Code would help 'drive down the cost of infrastructure in the UK so that we can invest where it's most needed'.

Commercial secretary to the Treasury, Lord Deighton, said: ‘It's a great step in the right direction, with organisations across the delivery spectrum as well as central government departments already signed up.

'I hope many more commit to improving the way we run our infrastructure in the UK, to make sure we have the public buildings, networks and knowledge we need to compete in the global race.'

The Code sets out eight key commitments for private sector parties and eight for public bodies to encourage better working between the sectors.

Pledges include having a single point of contact for all parties on a project to ensure efficient use of time and good communication between sectors, and setting out how partners will drive efficiency savings throughout their organisation.

It also contains a number of new guidelines on transparency including updating partner organisations on day-to-day costs such as consumables.

The Treasury suggests the move has strong support within the private sector, with major organisations encouraged to sign up by top business lobby the CBI.

Jim Bligh, CBI head of public services reform, said: ‘This new Code will support more constructive relationships between commissioners, financiers and service providers and should boost market confidence.

‘We would encourage all businesses working with the government through such partnerships to sign up.'

The news follows last year's re-launch of PFIs by the Treasury in an attempt to shed some of its negative reputation and is part of the Government's wider Operational Savings programme.

Treasury officials claim the programme has already achieved over £1.5bn in savings since it was launched less than two years ago

Public sector parties to the Code commit to:

1. Provide a single point of contact who will have responsibility for co-ordinating the activities and collating the views of the public sector contracting party on a specific project and representing these views in discussions with private sector bodies.

2. Engage constructively and in a timely manner when dealing with private sector parties on specific PFI/PPP contracts.

3. Meet with their relevant private sector contract managers on a regular basis to discuss what savings and operational efficiencies have been made and to identify opportunities for improvement.

4. Work to identify options for operational improvements and engage pro-actively with the private sector to develop joint strategies to deliver efficiencies and savings.

5. Give reasonable and prompt consideration to measures and issues promoted by the private sector taking into account policy and practice requirements and commercial considerations.

6. Provide appropriate public sector resources and skills to ensure that any engagement with their PFI/PPP partners is as efficient and effective as possible.

7. Ensure that any engagements take into account the costs likely to be incurred by all parties and the economic benefit likely to be gained and act to minimise unnecessary expenditure.

8. Ensure constructive engagement with its PFI/PPP partners through the reasonable interpretation of all existing rights and obligations, taking into account statutory obligations and public service needs, set out in the project documents so as to help ensure that the private sector costs associated with realising efficiencies and savings are proportionate