Mutual Investment Models MIM

[edit] Background to Mutual Investment Models in Wales

Mutual Investment Models (MIM) were designed by the Welsh Government, and initially launched in 2017 as a mechanism to finance major capital projects where there is a scarcity of capital funding. They may be considered in a category of public / private investment models along with Public Private Partnerships (PPP) and Private Finance Initiatives (PFI), but have elements that differ.

MIM aims to improve public services by financing major public projects and supporting additional investment in social and economic infrastructure, it differs from traditional PPP/PFI by removing elements that do not promote the public interest whilst maintaining elements of best practice.

The first MIM report was published by the Welsh Government in July 2022 and described their activities over the period June 2021 to June 2022.

The second Mutual Investment Model Report 2022-2024 (see top image) was published in May 2024, both reports highlight a number of different characteristics of Mutual Investment Models (MIM) along with examples of use in current projects in Wales.

[edit] Mutual Investment Models as enhancements

The key elements of PPP/PFI which have been enhanced in the MIM are outlined and described in the above reports as:

• "optimum risk allocation, whole-life costing, and performance-based payments – while ensuring that new investment is classified to the private sector
• private partners being obliged to help deliver the objectives of the Well-being of Future Generations (Wales) Act 2015 – including a focus on long-term sustainability and environmental efficiency
• financial and contractual remedies for non-delivery of stretching community benefits
• a mandatory commitment to the Welsh Government’s ethical employment code
• value for money as a core objective
• excluding provision for soft services (e.g. cleaning and catering) and capital equipment (e.g. specialist equipment for medical facilities), which led to expensive and inflexible contracts in the traditional PPP/ PFI model
• the public sector investing a small amount of risk capital in each scheme, ensuring a participation in any return on investment; and the appointment of a public sector nominated director to manage the public shareholdings
• a commitment to transparency, of which this Report forms a part."

[edit] MIM project delivery that promotes public interest

The Welsh Government describe two methods of delivery for MIM portfolio projects:

• Direct delivery: Where a single special purpose vehicle (SPV) is formed to deliver a specific project under a public private partnership ‘design, build, finance, maintenance and lifecycle’ contract known as the Project Agreement. This is suitable where the public sector is looking to procure a single high value asset.
• Strategic Partnership: An appointed single strategic partner delivers several assets for a range of authorities. The SPV delivers partnering services to the authorities. The strategic partner supports the delivery of a pipeline of MIM projects, and each authority enters into a project agreement for the delivery of its asset.

The public interest benefits described by the Welsh Government in the report include:

• Community Benefits: Private partners support contract authorities to achieve Wellbeing of Future Generations Act goals: job creation, training, apprenticeships, school engagement, and community initiatives. Promote supply chain support for SMEs and social enterprises, where non-compliance may result in financial penalties.
• Ethical Employment: Partners adhere to the Welsh Government’s Code on Ethical Employment, promoting fair work and sustainability within projects.
• Improving Value for Money: The MIM model optimises value by excluding capital equipment and facility management services from projects, allowing direct public funding for these.
• Public Sector Nominated Director: A public sector-nominated director on the SPV board ensures public interests in decision-making.

For further information about current Welsh Government MIM projects se Mutual Investment Model Report 2022-2024

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