6.32 The Government has announced its intention to reform the Private Finance Initiative (PFI). The Government will expect a new delivery model to draw on private sector innovation but at a lower cost to the taxpayer, offering better value for investment in public services.
6.33 The Government will launch a call for evidence in December 2011 to bring forward proposals for a new approach in using the private sector in the delivery of public assets. The call for evidence will ensure that the mistakes of the past are learnt from while making full use of the wealth of experience across the public and private sectors.
6.34 The Government's approach to reform will be guided by the following principles, to create a model that:
• is less expensive, and that uses private sector innovation to deliver services more cost effectively;
• can access a wider range of financing sources, including encouraging a stronger role to be played by pension fund investment;
• strikes a better balance between risk and reward to the private sector;
• has greater flexibility to accommodate changing public service needs over time;
• maintains the incentive on the private sector to deliver capital projects to time and to budget and to take performance risk on the delivery of services;
• delivers an accelerated and cheaper procurement process; and
• a model that gives greater financial transparency at all levels of the project so that the public sector is confident that it is getting what it paid for, and that the taxpayer is sure it is getting a fair deal now and over the longer term.