Are there features of the PFI model that should be retained? 

There are important features of the availability payment based pay-as-you-use model as embodied by both PFI and NPD that deliver value and should be retained. At the heart of these are: 

Integration: Of design, construction and life cycle maintenance to bring a clear and (through whole-life cost competition) incentivised focus to optimising the whole-life cost and operability of the asset. 

Diligence: Ensuring that a contract is only entered into for the delivery of the asset when the specification, price, programme and commercial conditions are properly aligned to give reasonable certainty of delivery. This diligence is particularly strong when it is performed for senior funders who have clear incentives not to lose money.

Risk Transfer:  There is value in the certainty delivered through transferring risk to a party clearly incentivised and skilled in managing it. SFT has previously said that it "believes fundamentally that there is risk in these projects and that there is value in transferring elements of that risk to another party....... Seeking to finance them at Government's risk-free rate of borrowing does not mean that all risk is abolished. The risk varies through the life of the project, and there is a very valid argument to recognise this and only pay financing costs that involve high risk premiums during the construction phase where the real risk for most projects exists.5" 

Certainty of Maintenance: This is an important and often overlooked feature of PPP structures which means that the condition of the asset after 25 years is good and predictable. The standards set for condition at hand back of the assets could be altered if procurers feel that the condition requirement is too high, but the presence of an up-front contractual requirement to pay for maintenance to an agreed standard has been shown to be perhaps the only way in the public sector budget prioritisation mechanism to ensure budgets for maintenance are prioritised. SFT has said "if you are not prepared to maintain an asset, you shouldn't retain it. It can well be argued that this is the central benefit of PPP style procurement - you contract for the maintenance of the asset as you contract for it to be constructed. It seems to me a false argument to say that the differential is because the private sector is inherently better at looking after assets - most asset managers in the public sector know exactly what needs to be done. It is simply that in the public sector budget setting processes, the only way that we can bring ourselves to make enough money available to maintain assets properly is by contractually committing it to a third party, the moral commitment made when the asset is created seems to simply not be strong enough6".