In order to strengthen significantly the partnership between the public and private sectors, the Government will look to act as a minority equity co-investor in future projects. This will enable:
• greater alignment of interests between the public and private sectors, and a more collaborative approach to improving project performance and managing risk;
• better partnership working, with the public sector having greater visibility of project information and more involvement in strategic decision making;
• more transparency, including in relation to the financial performance of the project company, through its project company board membership; and
• value for money to be improved as, subject to the appropriate management of project risk, the public sector will share in the ongoing investment returns, reducing the overall cost of projects to the public sector.
To ensure an effective role is played by the public sector as an equity investor and to minimise the potential for conflicts of interest between the public sector acting as both investor and procurer, the equity investment will be managed by a commercially-focused central unit located in the Treasury, separate from the procuring authority. The unit will be managed by individuals with the appropriate professional skills to oversee the investment and make commercial decisions. Investment will be made on the same terms as those agreed by the private sector for a particular project.