Public Private Partnerships and the Private Finance Initiative

1
Public Private Partnerships andthe Private
Finance Initiative

• David Locke
• Public Private Partnerships Programme (the 4Ps)

2
Presentation Outline

• The 4Ps
• Position on local authority PFI
• Reasons for using partnerships
• Lessons learned
• Key issues for the chief financial officer

3
4ps Products
Influence
Project Support
Know How
4
Local Authority PFI

• 169 projects approved for funding
• 4 billion new investment
• 72 projects signed
• 42 projects operational
• Deal flow in some sectors
• Limited use of own resources

5
Investment in Local Services

• 602 new schools
• 250,000 new street lights
• New trams, roads and interchanges
• 50,000 refurbished council dwellings
• 700 residential social services spaces
• 10 new leisure facilities
• Innovative solutions to service delivery

6
Drivers for Change

• More partnership working
• Best Value
• Modernisation agenda
• Internal examination of services
• Fewer restrictions/well-being powers
• Service improvements
• Good services require infrastructure
• Budgetary constraints
• Intervention
• Risk transfer
• New ways of working

Change Drivers
New service delivery methodologies
Existing service delivery methodologies
7
Project and Procurement Options
Outsourcing
PFI
Other PPP eg NPDO
Improved in-house provision
Joint Ventures
Joint/pooled budgets
LA Companies
Agency
Secondment
8
Why use Partnerships and the PFI?

• Value for money and Best Value
• Risk management
• Incentive to deliver whole-life solution
• Focus on service rather than functions
• Payment for service delivered
• Integration of service delivery with design and
  build
• Innovation and step change in service provision

9
Public private partnerships also...

• Make interference more obvious
• Provide stability in service delivery
• Enables integration of design with execution and
  maintenance
• Enables quality of service delivery to be measured

10
Delivering Successful Projects

• Justified as part of strategic review
• Investment appraisal Business Case
• Departmental objectives
• Early private sector involvement
• Realistic assessment of costs and issues
• Focus on service requirements
• Project management

11
Finance Officer Involvement

• Business planning - financial modelling options
• Assessment of value for money, affordability and
  bankability
• Financial aspects of pre-qualification,
  short-listing and bid documents
• Payment mechanism
• Financial evaluation and assessment of Bids
• Accounting treatment

12
Conclusions

• Progress on PPP and PFI projects
• Standardisation and guidance material
• Spending Review 2002
• Deal flow in some sectors
• Byatt and Audit Commission reviews
• Best Value and new challenges

13
David Locke Telephone - 020 7472 1554 Fax -
020 7472 1560 Mobile - 07768 335099 E-mail -
david.locke_at_4ps.co.uk 6th Floor 83 Victoria
Street Westminster London SW1H 0HW www.4ps.co.uk