28/11/2024
More than 25 years on from the first PFI projects, the industry faces a number of challenges: multiple defects issues, high profile disputes, insolvencies and the need to plan for expiry and handback. In autumn 2024, we held a series of webinars, with panellists from local authorities, health trusts, Project Companies, FM contractors, lenders and the Infrastructure and Projects Authority (“IPA”) and central government. We felt this was an opportune time to do so, given the recent election of a Labour government, and widely publicised discussions about how to deliver infrastructure.
Our sector-leading experts set out their views on the very real benefits delivered by the PFI model, the challenges facing the industry, potential solutions to some of those challenges, and on how the PFI model can be adapted to deliver future infrastructure investment.
Bevan Brittan has advised on over 800 PFI/PPP schemes, and has extensive experience in the market. Our specialist teams currently support the establishment and procurement of new PPP schemes, and the management of existing PFI/PPP schemes, including variations, assistance with the expiry process, contract management, and disputes. Working with different stakeholders across the industry means we understand the value of seeing things from different perspectives.
In this first report, we look at the positives, and the challenges, of PFI. Whilst our panellists will not endorse all our conclusions, the discussions demonstrate that stakeholders in the sector have much in common, and are passionate and engaged about working together to drive positive change. In our report, we refer to a number of earlier reports issued by the National Audit Office (“NAO”) and the IPA, including the White Fraiser Report, which was issued by the IPA and written in response to concerns about behaviours and an increased risks of disputes. We also refer to the Association of Infrastructure Investors in Public Private Partnerships Report, ‘The Private Finance Initiative Model and the Social Infrastructure Challenge’, September 2024 (“AIIP Report”). However, our report is not intended to be a comprehensive review of all issued guidance.
We also explore whether a PFI/PPP model could be the solution to the challenge of delivering new economic and social infrastructure. Our report is not intended to be a comprehensive review of all available models, and at the time of writing, it is not clear whether there is any appetite for using private finance in this way. However, the engaging discussions highlighted the real benefits that PFI/PPP models can and have delivered. Following a comment from one panellist, the motto adopted by a number of our speakers was “Do PFI, but do it better”. We look briefly in this report at new models. Later this autumn, we will also issue a separate report on ways to address some of the challenges with existing operational PFIs.
