10. Question 10-Is there an optimal mix between conventional public procurement and Private Finance for public sector investment? What is the long run role of private finance in the delivery of infrastructure both in the UK and globally?
10.1 From data and experience to date, there does not seem to be an optimal mix of private and public sector procurement. HM Treasury have consistently stated that PFI should only account for 10-15% of public sector investment, and it is clearly only appropriate as a tool in certain situations (large capital projects, with clearly defined future requirements, etc). It is very much dependent on the risk profile and project characteristics. We recommend that both models continue to be used so one acts as a benchmark for the other.
10.2 John Laing has significant experience in both overseas and UK markets for private finance projects; including projects in Germany, Poland, Finland, Norway, Netherlands, Hungary, Australia, Canada and India. We have seen that many countries have looked to the UK and its experience of private finance as a solution for infrastructure renewal. Further, the Private Finance project skills that we have developed within the UK are hugely exportable. Whilst each country will look to adapt the model to suit its own respective requirements and market conditions, the UK will remain as the reference for innovation and further evolution of public private partnership models for many years to come.