First, and above all, the argument in this paper suggests that policy should strive to conserve the benefits that PFI has brought in the different market circumstances now presenting themselves. In practical terms, this means finding ways to preserve the policy incentive on public procurers to embrace the disciplines and rigour of private finance, for instance by devising a successor to the PFI Credit system which is not dependent on accounting treatment. There is a real risk that the efficiency gains made in the past 10-15 years will dissipate if procurers swing back towards conventionally financed projects. While such a swing would be accompanied by sighs of relief in some quarters, those sighs would be the symptom that necessary disciplines were being relaxed. Robust procedures must be put in placed to ensure that the right procurement and financing route is adopted in each case.
Secondly, the policy should be directed towards refining and honing the existing private finance models, in particular by trying to secure some of the benefits of senior debt more efficiently. The drive to shorten procurement timetables and make tender processes more transparent and predictable (made all the more necessary by the introduction of Competitive Dialogue) should continue. Not only will this reduce bid costs, but it should serve to put downward pressure on primary equity returns, which are currently affected by investors' perceptions of the risks of the procurement process.
Thirdly, the urge to adopt "new models" should be approached with caution. Two models involving public sector equity - LIFT and Building Schools for the Future - have been rolled out. There should be a pause for digestion and reflection before applying the public sector equity model to other sectors. Whatever the benefits brought by public sector involvement in the project delivery vehicle (and they could be considerable), it should not be forgotten that many of the benefits of PFI have come from plain, old-fashioned private sector equity. Public procurers should not be distracted from this fact by the glitter of new models; nor should those alternative models be allowed to blunt in any way the edge which the involvement of private finance brings to the execution of projects.