The United Kingdom has been a leader in modernising the way in which public infrastructure and services are delivered and finding new ways to work in partnerships with the private sector over the last twenty years.
The realities of the private sector market place exert a powerful discipline on businesses to maximise efficiency and take full advantage of business opportunities. Successful Public Private Partnerships (PPP) enable the public sector to access the discipline, skills and expertise of the private sector.
Not all PPPs have, however, been successful. The Private Finance Initiative (PFI), the form of PPP used most frequently in the United Kingdom, has become tarnished by its waste, inflexibility and lack of transparency.
Last year, the Government initiated a fundamental reassessment of PFI. To ensure that we fully understood the breadth and the depth of the problems with PFI, we undertook a call for evidence to gather views from interested parties. We are grateful for the time, effort and thoughtful consideration that respondents put in to their written responses; and to stakeholders who engaged in discussion and debate at bilateral and roundtable events.
We have listened to the concerns raised about PFI and carefully reviewed the evidence submitted in the review. A compelling case for reform was presented. This document announces the conclusions of our review of PFI and sets out the Government's new approach, PF2, for involving private finance in the delivery of public infrastructure and services.
We have sought to provide access to wider sources of equity and debt finance to improve the value for money of financing projects; to increase the transparency of the liabilities created by long term projects and the equity returns achieved by investors; to speed up and reduce the cost of the procurement process; and to provide greater flexibility in the provision of services. The taxpayer will become a shareholder in projects and share in the ongoing investor returns.
PF2 addresses the fundamental concerns that have been expressed by Parliament, the public sector and taxpayers. By commanding greater confidence among both taxpayers and providers we hope that PF2 will become an enduring part of public sector service and infrastructure provision for many years to come.
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