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Government/Public Sector - PFI/PPP

 

With the myriad of PPP/PFI projects either at planning stage, live or completed, Knowles has developed an extensive knowledge of the issues surrounding these, sometimes, controversial government procurement strategy projects.

Mostly, PFI initiatives have proved to deliver timely and cost-effective projects. There are still concerns regarding the costs of PFI but this has been seen by many to have diverted attention away from a more considered view of problems with some PFI programmes. The Treasury's new guidance on Value for Money Assessment1 has been broadly welcomed by those involved in PFI procurement.

Some of the problems with PFI have arisen because of the way in which the Public Sector Comparator (PSC)2 has been used. It is designed to provide a way of comparing the value of a project delivered through the PFI with a project delivered through conventional procurement. Other problem areas which have been identified are:

• Improving procurement practice
• Long-term contract management
• Need to manage the PFI market
• Competing in the PFI market
• Encouraging competition

Market innovations and the future of PFI

If PFI is to deliver projects in areas such as urban regeneration and social housing, more flexible models of PFI partnership, to allow smaller company involvement, need to be created. This may include allowing public sector partners to join private sector consortia to boost available capital. Knowles fully understand the issues associated with PFI in the business sectors such as Housing and regeneration and have been providing valued help and advice to our clients through the PPP/PFI services we offer. We also endorse the following, which formed a report by Bevan Brittan for the Legal 500:

 

Possible future methods of reducing bidding costs include:

• more Local Improvement Finance   Trust (LIFT)-style partnerships,   with shorter procurement times;

• increased standardisation of   contracts; and

• fewer small PFI deals, where   bidding costs are a high   percentage of the total;

Shortages of capable suppliers might be addressed by;

• partnerships like LIFT, needing   less private-sector equity;

• direct government equity   investment in PFI schemes;

• stable markets attractive to   bidders;

• measures to make the UK   construction industry in general   appeal to international suppliers;   and

• transparency about the pipeline   of future work.

If you require clarification or more information on PPP/PFI initiatives and the services provided by Knowles which help parties to PPP/PFI project please contact: info@jrknowles.com