Lessons from the Private Finance Initiative in the United Kingdom

Patricia Leahy ()
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Patricia Leahy: UK National Audit Office

No 8/2005, EIB Papers from European Investment Bank, Economics Department

Abstract: This paper examines the UK experience of PPP/PFI from a value for money perspective. It argues that a rounded view of overall performance has to consider the procurement process, the construction of the asset procured, and the operational performance that follows. Important changes have been made in the UK to the appraisal stage of the procurement process, raising the likelihood of PFI being chosen when it is most likely to deliver value for money. While PFI has evidently performed well in the construction phase, the UK experience suggests a number of prerequisites for achieving value for money in the operational phase. Good contract management is needed to ensure that the risk transfer paid for actually sticks. Provisions to manage changes to contracts in a way that preserves value for money are important. An ability to benchmark the cost and quality of services provided over the long term is also likely to enhance the value for money achieved.

Keywords: private finance initiative; value for money; United Kingdom (search for similar items in EconPapers)
JEL-codes: H40 H43 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2005-06-06
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:eibpap:2005_008

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