4. How does the performance (eg, cost, delivery dates and service quality) of schools, hospitals, prisons, roads and other projects operated under private finance compare to those which were traditionally procured?
4.1 As per the answer to the question above, it is a challenge to compare the costs, performance and quality of PF/PPP projects and those procured using public capital as the data for the latter group is historic and some costs, eg on-going maintenance and life-cycle, simply do not exist. However, back when projects were traditionally procured, research undertaken by the Department of Health made clear that the vast majority of such projects were built late, with significant cost overruns and a high proportion ended up in court cases with contractors.
4.2 Projects procured under LIFT typically see some of the shortest procurement times in the public sector. LIFT projects have been on time and cost less than previous schemes delivered through public capital, as this is a requirement of the business case process. In addition, performance is enhanced as a result of schemes being fully and properly maintained over their lifetimes. One of the main reasons for the establishment of LIFT was to reverse the previous situation whereby once health facilities were built, they were not subsequently maintained to an appropriate level and became dilapidated because of a lack of resources. LIFT has been successful in attracting over £1.8 billion in new investment in primary care and community facilities, with the scheme initially focusing on some of the most deprived areas of England.
4.3 In addition, facilities built under PF/PPP see a much higher level of initial build quality given that maintenance costs over a period are built in and must be met by the private sector partner. It is also worth noting that the private sector is obligated under PPP contracts to monitor public satisfaction with its facilities, something which was never required with public schemes.