Procurement outcomes in the United Kingdom have improved as a result of the involvement of the private sector in delivering public infrastructure and related services. Private finance has been an important part of that story, through the analysis, management and mitigation of risk.
There is a strong argument that the apparent private finance cost premium is illusory. But the appearances say that the private sector cost of capital is higher than the government's cost of debt. So governments have political and presentational, as well as substantive, reasons to exert downward pressure on the private sector's cost of finance. Taken to the extreme, this could lead to attempts to erode altogether the (apparent) cost premium through wider use of conventional procurement or through comprehensive government guarantees of private finance. This would, however, be to forget the hard learned lessons of the past, and to fall back into the lazy thinking that (apparently) cheaper is better.
The challenge for the public sector is to allocate risks optimally between itself and the private sector; and then to run procurement programmes and negotiate individual deals, so that the private sector receives an appropriate but not excessive reward.