Public private partnerships PPP
PPP's were first developed in the UK in the 1990's 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 tax payers.
PPP's 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 (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.
 Related articles on Designing Buildings Wiki
- Construction contract.
- Crown build.
- Government Construction Strategy.
- Independent Client Advisers.
- Integrated Supply Team.
- Major Projects Authority.
- Output-based specification.
- PF2 (successor to PFI).
- Pre-Contract Services Agreement.
- Private developer scheme.
- Private Finance Initiative.
- Procurement route.
- Public procurement.
 External references
Featured articles and news
What is Modernism?
Modernist architecture and its many international variations explained.
BRE support Europe-wide strategic heating plans for local and national authorities.
Work set to begin on 'one of America's greatest parks', which will be 10 times bigger than Central Park.
One of our most popular articles - RSHP's Mike Davies writes about the concept design process.
As Cuba mourn the death of Castro, major renovation of this symbolic landmark may be a reflection of the country's fresh start.
How cannabis plants are used to create an alternative building material with plenty of advantages.
What does Mayor Sadiq Khan's first policy statement mean for London's infrastructure?
Bjarke Ingels Group announced as winners of design competition for new residential landmark in Amsterdam.
Designing Buildings Wiki has reviewed a well-designed and researched set of architecture city maps.
Designing Buildings Wiki attended the second annual Building Live conference, tackling the challenges facing construction.