Public private partnerships PPP
Public Private Partnerships (PPPs) are a very broad range of partnership where the public and private sectors collaborate for some mutual benefit.
PPPs were first developed in the UK in the 1990s in the belief that private sector companies might be more efficient at providing certain services than public authorities and so could deliver better value for money for taxpayers.
PPPs can cover a range of partnerships to deliver policies, services, buildings or infrastructure, from hospital catering to maintenance and renewal of London Underground. Partnerships can be with either central or local government.
The three main categories of PPP are:
- Concession contracts, where a private sector company provides a concession on behalf of a public authority, for which the public pays them (such as a toll road).
- Private Finance Initiatives (PFI), where a private sector company finances and provides a public service that might include construction, maintenance and operation, for which they are paid by a public authority.
- Institutional PPP where a joint venture company is established jointly by a public authority and a private company to provide a public service.
PFI is the most common form of PPP (ref. HM Treasury: Public private partnerships), and is one of the three procurement routes preferred by the Government Construction Strategy for central civil government projects. Generally it is only suitable for large-scale projects, i.e. those with a capital cost of over £20 million (ref. Achieving Excellence Guide 6 - Procurement and Contract Strategies P6), such as hospitals and schools.
However, in 2011, the damning House of Commons Treasury Select Committee report on PFI found '...that PFI projects are significantly more expensive to fund over the life of a project' and that there is no '...clear evidence of savings and benefits in other areas of PFI projects which are sufficient to offset this significantly higher cost of finance'. It is difficult to see where this leaves private finance initiatives,
Following a review of PFI, the government published details of a new approach in 2012, stating that it '…remains committed to private sector involvement in delivering infrastructure and services, but has recognised the need to address the widespread concerns…'.
The new version of PFI is referred to as PF2. See PF2 for more information.
However, in the 2018 Autumn Budget, Chancellor Philip Hammond confirmed that the government would be scrapping both PFI and PF2 contracts, with no more being signed. Addressing the House of Commons, Hammond said: "I'm committed to PPP where it delivers value to the taxpayer and shifts risk to the private sector. There is compelling evidence that PFI does neither."
On 13 March 2019, The government opened a consultation on how best to support private investment in infrastructure. The review will look at the government’s tools for supporting private investment, and how they are delivered, in the context of the UK’s changing relationship with the European Investment Bank. The consultation closes on 5 June 2019. Ref https://www.gov.uk/government/consultations/infrastructure-finance-review
[edit] Related articles on Designing Buildings
- Availability payments.
- Build lease transfer BLT.
- Build operate transfer BOT.
- Build, own, operate and transfer (BOOT).
- Concession agreement.
- Crown build.
- Design, build, finance, maintain DBFM.
- Design Build Finance Operate Maintain DBFOM.
- Design build finance transfer (DBFT).
- Design build operate (DBO).
- Design build operate transfer DBOT.
- Design construct manage finance DCMF.
- Flexibility in PPP Contracts: Best practices from countries where Abertis operates.
- Government Construction Strategy.
- Major Projects Authority.
- Midland Expressway Ltd v Carillion Construction Ltd & Others.
- PF2 (successor to PFI).
- Partnership.
- PPP unit.
- Pre-Contract Services Agreement.
- Private developer scheme.
- Private Finance Initiative.
- Private sector.
- Procurement route.
- Public procurement.
[edit] External references
- HM Treasury: Public Private Partnerships, the governments approach (2000).
- CLG: Public Private Partnerships and Private Finance Initiative (now archived).
- Achieving Excellence Guide 6 - Procurement and Contract Strategies.
- House of Commons Treasury Select Committee report on PFI.
Featured articles and news
Deputy editor of AT, Tim Fraser, discusses the newly formed society with its current chair, Chris Halligan MCIAT.
Barratt Lo-E passivhaus standard homes planned enmasse
With an initial 728 Lo-E homes across two sites and many more planned for the future.
Government urged to uphold Warm Homes commitment
ECA and industry bodies write to Government concerning its 13.2 billion Warm Homes manifesto commitment.
Places of Worship in Britain and Ireland, 1929-1990. Book review.
The emancipation of women in art.
CIOB Construction Manager of the Year 2025
Just one of the winners at the CIOB Awards 2025.
Call for independent National Grenfell oversight mechanism
MHCLG share findings of Building Safety Inquiry in letter to Secretary of State and Minister for Building Safety.
The Architectural Technology Awards
AT Awards now open for this the sixth decade of CIAT.
50th Golden anniversary ECA Edmundson awards
Deadline for submissions Friday 30 May 2025.
The benefits of precast, off-site foundation systems
Top ten benefits of this notable innovation.
Encouraging individuals to take action saving water at home, work, and in their communities.
Takes a community to support mental health and wellbeing
The why of becoming a Mental Health Instructor explained.
Mental health awareness week 13-18 May
The theme is communities, they can provide a sense of belonging, safety, support in hard times, and a sense purpose.
Mental health support on the rise but workers still struggling
CIOB Understanding Mental Health in the Built Environment 2025 shows.
Design and construction material libraries
Material, sample, product or detail libraries a key component of any architectural design practice.
Construction Products Reform Green Paper and Consultation
Still time to respond as consultation closes on 21 May 2025.
Resilient façade systems for smog reduction in Shanghai
A technical approach using computer simulation and analysis of solar radiation, wind patterns, and ventilation.