This report is the result of a research project commissioned by the Scottish Executive to further its knowledge and understanding of the performance of Public Private Partnership (PPP1) projects in Scotland. The aims of the research were:
Stage 1: to provide an initial assessment of the relative costs and benefits of PPP procurement in comparison to conventional procurement, and of the underlying causes of good and bad performance;
Stage 2: to assess the potential merits of centrally collecting additional performance monitoring information and other data in order to inform future PPP performance evaluations, and to provide recommendations on what data should be collected.
Section 1.1 summarises the evidence from our survey of operational projects in Scotland organised around the key questions set out in the terms of reference. The section concludes with a list of the immediate recommendations that arise from the survey evidence. As the Scottish Executive recognised at the outset, the high-level nature of the study does not enable us to provide definitive answers to all of the questions posed in the brief. Furthermore, since PPPs are a comparatively recent development, and involve long-term contracts, operational experience of FM services is relatively limited and whole life aspects of the contracts cannot be fully assessed at this stage.
Section 1.2 then provides CEPA's overall assessment of these questions drawing on both the survey work and our previous experience of PPPs. It is important to recognise that our assessment is judgemental.
Section 1.3 summarises our findings on Stage 2 of the work. Our approach has been to consider in particular what further work (including but not limited to the collection of data) would be needed to build up a body of evidence about the relative costs and benefits of PPP compared with conventional procurement.
______________________________________________________________
1 Many projects involve some sort of partnership between the public and private sectors. We restricted this study to projects that involve long-term payments to the private sector in return for the provision of a public service asset. PPP projects of this type are often referred to as Private Finance Initiative (PFI) projects. PPP projects typically differ from conventionally procured projects in that a single contract is let for the design, construction and operation of an asset and long-term financing is provided by the private sector.