The growing power of infrastructure funds raises key issues. For example, what is the likely growth trajectory of secondary market funds? Could they develop education and health funds that diversify into the finance and delivery of core services to groups of academies and NHS Trusts?
The PPP model and secondary market is enabling large construction companies and finance capital to not only heavily influence the public infrastructure is terms of what is built, where and when, how they are managed and operated, but also creating new financial institutions that will influence what happens at the end of the contract and future options.
They will also be able to exercise their power in the client's approach to contract monitoring and to challenge their assessment of performance, particularly if financial penalties are imposed. This poses a challenge to how public bodies and government departments corporately manage PPP assets, particularly when they have several projects, and have the capability to obtain intelligence and negotiate with secondary funds.
Theoretically PFI/PPP assets will transfer to the government or public sector at the end of the contract, but circumstances can change significantly over the next 10-25 years. Firstly, will the public sector have the capability and resources to takeover managing and operating hospitals, schools, transport systems and other infrastructure assets? Secondly, will this be a political priority if neoliberalism is further embedded? Thirdly, infrastructure funds and PPP companies are unlikely to be neutral when contracts reach the end of their term. They are more likely to propose new operational contracts or new PPPs to address the deterioration of buildings or to adapt building to new service delivery models or to accommodate changes in social needs. It is unlikely that infrastructure funds will standby and see their portfolios shrink as contracts reach the end of their term.