There must be political buy-in for PPPs to make progress, and political stability is key to their continued success. Long term commitment from a government to PPPs is important for business confidence. Other groups, such as lenders, will be reluctant to enter and invest in PPP markets if there is no clear political support. This requires a clear vision from the government of what it hopes to achieve by using PPPs and adequate resource commitments to create a sustainable pipeline of deals.
Since 1992, UK Labour and Conservative governments have both shown a clear commitment to PPPs and brought forward reforms to develop PPP markets. This process started with the introduction of a PFI model under the Conservative government in 1992, and has gathered pace since the change of administration in 1997. The Labour party was elected in 1997 on a manifesto that promised to "reinvigorate the private finance initiative" and referred to Labour as the "pioneer of the idea of public private partnerships".12
This commitment to public private partnerships was further demonstrated in 2000 through the publication of Public-Private-Partnerships: the government's approach. It stated that Labour saw PPPs as a way to develop a constructive relationship to renew Britain's infrastructure in key areas such as railways, urban regeneration, housing and childcare.13 The report also identified three main objectives for the government's use of PPPs:
■ To deliver significantly improved public services by contributing to increases in the quality and quantity of investment
■ To release the full potential of public sector assets -including state-owned businesses- and hence provide value for the taxpayer and wider benefits for the economy
■ To allow stakeholders to receive a fair share of the benefits of a PPP. This includes customers and users of the service being provided, taxpayers and employees at every level of the organisation.14
As a result, the last ten years have seen concrete steps taken to develop PPPs in the UK:
■ A specific PPP/PFI taskforce has been set up within the Treasury
■ The government has committed to the PFI until 2010
■ The Office of Government Commerce (OGC) has been created to guide procurement, and the National Audit Office (NAO) has been given the power to independently oversee PPPs.
The national case studies in this section demonstrate that other countries are now following a similar route, and benefiting from taking bold political steps to adopt PPPs.