PPP/PFI solutions do not seem to be particularly appropriate for ICT projects, especially because of their fast-moving nature and preferences for the involved services. This inappropriateness has been stressed in the economic literature-Iossa and Martimort (2008), for example, argue that "PPPs seem unsuitable for fast-moving sectors; performance failures have been widespread in PPPs for specialized IT in the UK." Iossa and Russo (2008), concur that "in sectors where users' preferences change rapidly over time, PPP arrangements are inappropriate, as the UK experience in IT projects witnesses."25
Real-world practices are moving away from PPPs in IT. For instance, the Public Private Partnership Policy Framework and Guidance of the Northern Ireland Department of Finance and Personnel (section 5.2.6) states that "(...) resources should not be wasted investigating PPP solutions where they are clearly not appropriate. For instance, PFI solutions are not usually considered appropriate for Information and Communication Technology (ICT) projects."
This approach is also being followed by the Broadband Delivery UK (BDUK) project, currently in progress. BDUK is meant to improve the UK's broadband network, particularly emphasising on making high-speed broadband available in rural communities. The ambition is to provide superfast broadband to at least 90% of UK households, and to provide universal access to standard broadband with a speed of at least 2 Mbps. This is one of the major infrastructure projects in which there is capital investment from the public sector, to which Infrastructure UK (IUK) provides support. The government has allocated £530 million to stimulate commercial investment to roll out high-speed broadband in rural communities. BDUK is responsible for managing the rural program, whereas local authorities and the devolved administrations are responsible for individual projects. Local authorities can run mini-competitions to select a specific supplier to deliver broadband services for a local project.
As this project largely targets rural areas, it is unlikely to be very profitable or attract private investors. Moreover, the "social" benefits of the project are a good justification for the public contribution. Nonetheless, this story seems to confirm that PPP arrangements are not regarded as an appropriate instrument for IT projects, or where social concerns place a constraint on the user charges that might make a project interesting for the private sector. The latter may also apply with some other rural infrastructure, such as feeder roads.