The widespread perception of the respondents to our survey is that PPP provided a mechanism to bring forward investment in new infrastructure at a time when large-scale investment in essential infrastructure was needed. How do we explain these observations, and are they consistent with Government's general approach which suggests that procurement choice should be based on value for money considerations?
Again the scope of the study has not included time to explore these issues in detail. However, on the basis of information provided to us by the Scottish Executive, our understanding is that these responses are an accurate representation from the perspective of public sector managers in local authorities, hospital boards and within the water and sewerage sectors at that time.
The clear implication is that the existence of PPP did allow local public managers to 'bring forward' investment compared to what would have been achieved within the constraints of public capital. We therefore believe that, when the contracts in our Survey were let, public sector managers may have been constrained in relation to the procurement choices available to them. This does not necessarily suggest that the PPP projects undertaken were poor value for money. Indeed, authorities were still required to demonstrate value for money compared to the alternatives. There are of course separate issues which we have not considered here around the robustness of public sector comparator analysis. Nevertheless our survey suggests that the majority of authorities considered PPP to represent good or excellent value for money.
There are two important points to note:
First, the perception of 'bringing forward' investment at the local level is entirely consistent with central control of the levels of investment taking place within Scotland (and indeed within the rest of the UK). Just as public capital is constrained centrally so was the extent to which local authorities and other public sector bodies could use PPP (e.g. by the amount of LPFS support available in the case of local authorities).
Second, these conclusions do not necessarily still hold. Indeed, we understand that the new 'prudential borrowing' regime within local government means that public sector managers will be able to take decisions on procurement options based primarily on value for money concerns.