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Akintola Akintoye - One of the best experts on this subject based on the ideXlab platform.
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THE FINANCIAL STRUCTURE OF Private Finance Initiative PROJECTS
2014Co-Authors: Akintola Akintoye, Cliff Hardcastle, Matthias Beck, Ezekiel Chinyio, Darinka AsenovaAbstract:Over the past years PFI has become a key approach to public –Private partnership in the UK. Unlike other forms of co-operation between the public and the Private sector, PFI involves the investment of Private capital in projects, which provide services to the public. This paper focuses on the financial structure of the PFI schemes and explores the financing options available to PFI participants. Based on 48 elite interviews with senior representatives from leading UK international companies, we identify the currently predominant form of Finance through senior and subordinated debt, which we contrast with the use of bond Finance and some rarely used financing methods like lease Finance and Mezzanine Finance. We note that the convergence of PFI financial practices allows for the use of financial models, which lend themselves to standardization. Our paper concludes with the proposition that a greater standardization of the planning practices associated with PFI, could help counter criticisms of PFI which view this type of procurement as inefficient and costly
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Private Finance Initiative in the healthcare sector trends and risk assessment
Engineering Construction and Architectural Management, 2005Co-Authors: Akintola Akintoye, Ezekiel ChinyioAbstract:Purpose – The UK Government has now adopted Private Finance Initiative (PFI) as a major vehicle for the delivery of additional resources to the health sector in order to achieve a greater investment in healthcare facilities. The purpose of this paper is to examine the trends and risk assessment of the PFI in the healthcare sector.Design/methodology/approach – The paper employed secondary data and interviews of key participants in two hospital PFI projects to highlight developments in healthcare PFI and the risk management of hospital projects.Findings – The results show that the use of PFI in the provision of healthcare is increasing in terms of number, capital value and size of projects. What emerged in the healthcare PFI project was a usage of a plethora of risk management techniques, albeit to varying degrees. Experience appeared to be the prime risk assessment technique employed, while risk avoidance was first explored before pricing and allocating any residual risks. “Risk prompts”, such as using che...
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critical success factors for ppp pfi projects in the uk construction industry
Construction Management and Economics, 2005Co-Authors: Akintola Akintoye, Cliff HardcastleAbstract:Public–Private partnerships (PPPs) are increasingly used in the United Kingdom's public facilities and services provision through the Private Finance Initiative (PFI). Despite some casualties, PPP/PFI projects have been undertaken successfully, but the reasons for success are not entirely clear. Questionnaire survey research examined the relative importance of 18 potential critical success factors (CSF) for PPP/PFI construction projects in the UK. The results show that the three most important factors are: ‘a strong and good Private consortium’, ‘appropriate risk allocation’ and ‘available financial market’. Factor analysis revealed that appropriate factor groupings for the 18 CSFs are: effective procurement, project implementability, government guarantee, favourable economic conditions and available financial market. These findings should influence policy development towards PPPs and the manner in which partners go about the development of PFI projects.
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perceptions of positive and negative factors influencing the attractiveness of ppp pfi procurement for construction projects in the uk findings from a questionnaire survey
Engineering Construction and Architectural Management, 2005Co-Authors: Akintola Akintoye, Peter Edwards, Cliff HardcastleAbstract:Purpose – The paper aims to report the findings of research into perceptions of what makes the Private Finance Initiative (PFI) attractive or unattractive as a procurement system for projects in the UK.Design/methodology/approach – The research uses a postal survey questionnaire technique for primary data collection. Literature review is used to identify relevant factors, which are then incorporated into the design of the survey instrument. Survey response data is subjected to descriptive statistical analysis and subsequently to rotated factor analysis.Findings – Public/Private partnerships (PPP)/PFI project procurement is perceived as most attractive in terms of positive factors relating to better project technology and economy, greater public benefit, public sector avoidance of regulatory and financial constraints, and public sector saving in transaction costs. Negative aspects, relating to factors such as the inexperience of the participants, the over‐commercialisation of projects, and high participati...
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achieving best value in Private Finance Initiative project procurement
Construction Management and Economics, 2003Co-Authors: Akintola Akintoye, Cliff Hardcastle, Matthias Beck, Ezekiel Chinyio, Darinka AsenovaAbstract:The wherewithal of achieving best value in Private Finance Initiative (PFI) projects and the associated problems therein are documented. In the UK, PFI has offered a solution to the problem of securing necessary investment at a time of severe public expenditure restraint. In PFI schemes, the public sector clients must secure value for money, while the Private sector service providers must genuinely assume responsibility for project risks. A broad‐based investigation into PFI risk management informs the discussion in this paper. It is based on 68 interviews with PFI participants and a case study of eight PFI projects. The research participants comprised of contractors, financial institutions, public sector clients, consultants and facilities management organizations. The qualitative software Atlas.ti was used to analyse the textual data generated. The analysis showed that the achievement of best value requirements through PFI should hinge on: detailed risk analysis and appropriate risk allocation, drive fo...
Cliff Hardcastle - One of the best experts on this subject based on the ideXlab platform.
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THE FINANCIAL STRUCTURE OF Private Finance Initiative PROJECTS
2014Co-Authors: Akintola Akintoye, Cliff Hardcastle, Matthias Beck, Ezekiel Chinyio, Darinka AsenovaAbstract:Over the past years PFI has become a key approach to public –Private partnership in the UK. Unlike other forms of co-operation between the public and the Private sector, PFI involves the investment of Private capital in projects, which provide services to the public. This paper focuses on the financial structure of the PFI schemes and explores the financing options available to PFI participants. Based on 48 elite interviews with senior representatives from leading UK international companies, we identify the currently predominant form of Finance through senior and subordinated debt, which we contrast with the use of bond Finance and some rarely used financing methods like lease Finance and Mezzanine Finance. We note that the convergence of PFI financial practices allows for the use of financial models, which lend themselves to standardization. Our paper concludes with the proposition that a greater standardization of the planning practices associated with PFI, could help counter criticisms of PFI which view this type of procurement as inefficient and costly
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critical success factors for ppp pfi projects in the uk construction industry
Construction Management and Economics, 2005Co-Authors: Akintola Akintoye, Cliff HardcastleAbstract:Public–Private partnerships (PPPs) are increasingly used in the United Kingdom's public facilities and services provision through the Private Finance Initiative (PFI). Despite some casualties, PPP/PFI projects have been undertaken successfully, but the reasons for success are not entirely clear. Questionnaire survey research examined the relative importance of 18 potential critical success factors (CSF) for PPP/PFI construction projects in the UK. The results show that the three most important factors are: ‘a strong and good Private consortium’, ‘appropriate risk allocation’ and ‘available financial market’. Factor analysis revealed that appropriate factor groupings for the 18 CSFs are: effective procurement, project implementability, government guarantee, favourable economic conditions and available financial market. These findings should influence policy development towards PPPs and the manner in which partners go about the development of PFI projects.
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perceptions of positive and negative factors influencing the attractiveness of ppp pfi procurement for construction projects in the uk findings from a questionnaire survey
Engineering Construction and Architectural Management, 2005Co-Authors: Akintola Akintoye, Peter Edwards, Cliff HardcastleAbstract:Purpose – The paper aims to report the findings of research into perceptions of what makes the Private Finance Initiative (PFI) attractive or unattractive as a procurement system for projects in the UK.Design/methodology/approach – The research uses a postal survey questionnaire technique for primary data collection. Literature review is used to identify relevant factors, which are then incorporated into the design of the survey instrument. Survey response data is subjected to descriptive statistical analysis and subsequently to rotated factor analysis.Findings – Public/Private partnerships (PPP)/PFI project procurement is perceived as most attractive in terms of positive factors relating to better project technology and economy, greater public benefit, public sector avoidance of regulatory and financial constraints, and public sector saving in transaction costs. Negative aspects, relating to factors such as the inexperience of the participants, the over‐commercialisation of projects, and high participati...
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achieving best value in Private Finance Initiative project procurement
Construction Management and Economics, 2003Co-Authors: Akintola Akintoye, Cliff Hardcastle, Matthias Beck, Ezekiel Chinyio, Darinka AsenovaAbstract:The wherewithal of achieving best value in Private Finance Initiative (PFI) projects and the associated problems therein are documented. In the UK, PFI has offered a solution to the problem of securing necessary investment at a time of severe public expenditure restraint. In PFI schemes, the public sector clients must secure value for money, while the Private sector service providers must genuinely assume responsibility for project risks. A broad‐based investigation into PFI risk management informs the discussion in this paper. It is based on 68 interviews with PFI participants and a case study of eight PFI projects. The research participants comprised of contractors, financial institutions, public sector clients, consultants and facilities management organizations. The qualitative software Atlas.ti was used to analyse the textual data generated. The analysis showed that the achievement of best value requirements through PFI should hinge on: detailed risk analysis and appropriate risk allocation, drive fo...
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achieving best value in Private Finance Initiative project procurement
Construction Management and Economics, 2003Co-Authors: Akintola Akintoye, Cliff Hardcastle, Matthias Beck, Ezekiel Chinyio, Darinka AsenovaAbstract:The wherewithal of achieving best value in Private Finance Initiative (PFI) projects and the associated problems therein are documented. In the UK, PFI has offered a solution to the problem of securing necessary investment at a time of severe public expenditure restraint. In PFI schemes, the public sector clients must secure value for money, while the Private sector service providers must genuinely assume responsibility for project risks. A broad-based investigation into PFI risk management informs the discussion in this paper. It is based on 68 interviews with PFI participants and a case study of eight PFI projects. The research participants comprised of contractors, financial institutions, public sector clients, consultants and facilities management organizations. The qualitative software Atlas.ti was used to analyse the textual data generated. The analysis showed that the achievement of best value requirements through PFI should hinge on: detailed risk analysis and appropriate risk allocation, drive for faster project completion, curtailment in project cost escalation, encouragement of innovation in project development, and maintenance cost being adequately accounted for. Factors that continue to challenge the achievement of best value are: high cost of the PFI procurement process, lengthy and complex negotiations, difficulty in specifying the quality of service, pricing of facility management services, potential conflicts of interests among those involved in the procurement, and the public sector clients' inability to manage consultants.
Darinka Asenova - One of the best experts on this subject based on the ideXlab platform.
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THE FINANCIAL STRUCTURE OF Private Finance Initiative PROJECTS
2014Co-Authors: Akintola Akintoye, Cliff Hardcastle, Matthias Beck, Ezekiel Chinyio, Darinka AsenovaAbstract:Over the past years PFI has become a key approach to public –Private partnership in the UK. Unlike other forms of co-operation between the public and the Private sector, PFI involves the investment of Private capital in projects, which provide services to the public. This paper focuses on the financial structure of the PFI schemes and explores the financing options available to PFI participants. Based on 48 elite interviews with senior representatives from leading UK international companies, we identify the currently predominant form of Finance through senior and subordinated debt, which we contrast with the use of bond Finance and some rarely used financing methods like lease Finance and Mezzanine Finance. We note that the convergence of PFI financial practices allows for the use of financial models, which lend themselves to standardization. Our paper concludes with the proposition that a greater standardization of the planning practices associated with PFI, could help counter criticisms of PFI which view this type of procurement as inefficient and costly
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stakeholder engagement and compliance culture an empirical study of scottish Private Finance Initiative projects
Public Management Review, 2011Co-Authors: Lokemin Foo, Darinka Asenova, Stephen J Bailey, John HoodAbstract:Abstract This research examines the experience of stakeholders of the Private Finance Initiative (PFI). The local authorities’ accounts of engaging stakeholders are compared against the stakeholders’ experience of being engaged. The findings suggest that the increasing procedures and tools used by local authorities to engage stakeholders do not necessarily lead to more positive experiences of the latter. Some stakeholders perceive engagement as merely an exercise by the local authorities to comply with central government policy guidelines and the stakeholders’ views have not had substantial impact on the overall decision-making process. The findings highlight the inadequacy of a compliance culture in public services.
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Private sector participation in health and social care services in scotland assessing the risk
International Review of Administrative Sciences, 2007Co-Authors: Darinka Asenova, William Stein, Claire Mccann, Alasdair MarshallAbstract:The UK Government faces increased pressure to provide health and social care services more cheaply yet at a high level of quality. Increased Private sector involvement in the funding and delivery of services is seen as a major part of the solution. When assessing the relative merits of approaches to Private versus public sector provision, risk may be an important differentiator. This article explores some key points of comparison on risk issues and builds a framework for the assessment of risk-related issues. A twin case study approach is adopted: a care home for older people and a Private Finance Initiative (PFI) hospital. The analysis suggests that in the case of both Private financing and of Private delivery of health and social care services, the increased involvement of the Private sector necessitates rigorous risk assessment and management.
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achieving best value in Private Finance Initiative project procurement
Construction Management and Economics, 2003Co-Authors: Akintola Akintoye, Cliff Hardcastle, Matthias Beck, Ezekiel Chinyio, Darinka AsenovaAbstract:The wherewithal of achieving best value in Private Finance Initiative (PFI) projects and the associated problems therein are documented. In the UK, PFI has offered a solution to the problem of securing necessary investment at a time of severe public expenditure restraint. In PFI schemes, the public sector clients must secure value for money, while the Private sector service providers must genuinely assume responsibility for project risks. A broad‐based investigation into PFI risk management informs the discussion in this paper. It is based on 68 interviews with PFI participants and a case study of eight PFI projects. The research participants comprised of contractors, financial institutions, public sector clients, consultants and facilities management organizations. The qualitative software Atlas.ti was used to analyse the textual data generated. The analysis showed that the achievement of best value requirements through PFI should hinge on: detailed risk analysis and appropriate risk allocation, drive fo...
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achieving best value in Private Finance Initiative project procurement
Construction Management and Economics, 2003Co-Authors: Akintola Akintoye, Cliff Hardcastle, Matthias Beck, Ezekiel Chinyio, Darinka AsenovaAbstract:The wherewithal of achieving best value in Private Finance Initiative (PFI) projects and the associated problems therein are documented. In the UK, PFI has offered a solution to the problem of securing necessary investment at a time of severe public expenditure restraint. In PFI schemes, the public sector clients must secure value for money, while the Private sector service providers must genuinely assume responsibility for project risks. A broad-based investigation into PFI risk management informs the discussion in this paper. It is based on 68 interviews with PFI participants and a case study of eight PFI projects. The research participants comprised of contractors, financial institutions, public sector clients, consultants and facilities management organizations. The qualitative software Atlas.ti was used to analyse the textual data generated. The analysis showed that the achievement of best value requirements through PFI should hinge on: detailed risk analysis and appropriate risk allocation, drive for faster project completion, curtailment in project cost escalation, encouragement of innovation in project development, and maintenance cost being adequately accounted for. Factors that continue to challenge the achievement of best value are: high cost of the PFI procurement process, lengthy and complex negotiations, difficulty in specifying the quality of service, pricing of facility management services, potential conflicts of interests among those involved in the procurement, and the public sector clients' inability to manage consultants.
Richard Laughlin - One of the best experts on this subject based on the ideXlab platform.
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identifying and controlling risk the problem of uncertainty in the Private Finance Initiative in the uk s national health service
Critical Perspectives on Accounting, 2008Co-Authors: Jane Broadbent, Jas Gill, Richard LaughlinAbstract:Risk estimation and uncertainty recognition are key elements in decision-making. This paper analyses decision-making processes, highlighting the way quantitative risk estimation is given a privileged position in decision processes thus ‘silencing’ qualitative uncertainties. This we argue is because of the dominance of ‘accounting logic’ in decision processes. The paper explores these relationships through analysis of the decision-making processes in the Private Finance Initiative (PFI) in the UK's National Health Service (NHS). To undertake a PFI option, in health or in other areas, involves deciding whether to contract with a Private sector operator to provide a range of services (including often an infrastructure element) in exchange for long-term regular payments. Four general propositions are developed and amplified through analysis of the PFI decision-making processes. First that PFI, like other forms of decision-making, is dominated by quantitative risk estimation. Thus PFI provides a unique and significant example of these processes with its emphasis on transferred risks to the Private sector. This quantitative dominance, we argue, is because of the pervading power of ‘accounting logic’ and this is illustrated through our research in 17 PFI health projects. Second, that the result of this dominance is that more qualitative concerns, such as uncertainty recognition, are downplayed even though they may be recognised at the pre-decision stage, very largely because at that point there are maximum anxieties surrounding the process of deciding. The 17 PFI cases provide a number of key examples of this thinking through their introduction of what are referred to as ‘shared risks’, which we see as qualitative uncertainties. Third, that at the post-decision project evaluation stage only some of the quantification concerns in the pre-decision stage are given visibility whilst all uncertainties are ignored. Again we link this analytically to the dominance of accounting logic. Eight of the 17 PFI cases are analysed and provide a powerful illustration of this general characteristic. Their sophisticated measurement of facility management issues ignores all ‘shared risks’ and even some of the quantitative transferred risks. Finally, the paper argues that unless there can be a fundamental reshaping of the mind set and/or the removal of the dominance of accounting logic there will be little hope of allowing equal emphasis of risks and uncertainties in decision-making to occur. In the PFI case there is evidence of a small but growing concern for recognising the importance of uncertainty and non-quantitative analysis. The outworking of this and its combination with quantitative analysis has the potential to provide important leads as to how to bring these important considerations into decision-making more generally. The paper is equivocal as to whether this development will occur very largely because of the resistance of accounting logic to change.
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government concerns and tensions in accounting standard setting the case of accounting for the Private Finance Initiative in the uk
Accounting and Business Research, 2005Co-Authors: Jane Broadbent, Richard LaughlinAbstract:Abstract The setting of accounting standards in the UK has always and will always be surrounded by tensions due to the different interests of those who are involved either in the production or operation of the resulting standards. While some interests come and go, the UK's governments, over time and of all political persuasions, have a continuing concern that the actions of the accounting profession more generally, and the content of accounting standards specifically, should be perceived to be in the public interest. Although the views on what is in the public interest change over time, what is clear is that where this public interest is perceived not to be upheld, then tension between the government of the time and (primarily) the accounting standard-setting bodies is inevitable. At these times various forms of questioning of the actions of accounting standard-setting bodies occur. However, it is important to stress that when the public interest is perceived to be upheld, no overt tension is apparent, bu...
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public Private partnerships an introduction
Accounting Auditing & Accountability Journal, 2003Co-Authors: Jane Broadbent, Richard LaughlinAbstract:Public Private partnerships (PPPs) are a recent extension of what has now become well known as the “new public management” agenda for changes in the way public services are provided. PPPs involve organisations whose affiliations lie in respectively the public and Private sectors working together in partnership to provide public services. This special issue of the Accounting, Auditing & Accountability Journal explores this new development, which, in its most advanced form, is contained in the UK’s Private Finance Initiative (PFI) but is now spreading across the world in multiple forms. This introduction provides an overview of this development as well as an outline of the seven papers that make up this special issue. These seven papers are divided into two parts – the first four looking at different aspects of PFI and the latter three providing three country‐based (from the USA, New Zealand and Australia) studies of PFI/PPP. Many questions about the nature, regulation, pre‐decision analysis and post‐project evaluation are addressed in these papers but many research questions remain unanswered, as this Introduction makes plain.
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evaluating the Private Finance Initiative in the national health service in the uk
Accounting Auditing & Accountability Journal, 2003Co-Authors: Jane Broadbent, Jas Gill, Richard LaughlinAbstract:This paper seeks to develop a system of how to judge the merit and worth of Private Finance Initiative (PFI) projects in the UK National Health Service (NHS) once they are operational. This concern is couched in relation to whether PFI can be seen to provide long‐term “value for money” (VFM) using a broad definition of this term. This paper does not attempt to further the debate that has focussed on the broader macro economic VFM arguments; rather, the focus is upon developing a model for evaluation at the organisational level where there is a paucity of direction and clarity. Whilst there are many VFM criteria available to guide whether PFI in the NHS should be pursued at the pre‐decision stage, there is little in the way of post‐project evaluation systems to judge VFM once decisions have been taken. Little thought has been given to the design of these post‐project evaluation systems let alone the experiences of how such systems may operate. This paper is addressing these lacunae but only in the sense of suggesting a design for a system for post‐project evaluation. This is drawn from PFI pre‐decision processes, post‐project intentions of some PFI schemes and evaluation theory. It is not about the judgements that come from the use of such a framework which the paper conclude will take some time to be forthcoming.
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control and legitimation in government accountability processes the Private Finance Initiative in the uk
Critical Perspectives on Accounting, 2003Co-Authors: Jane Broadbent, Richard LaughlinAbstract:Abstract This paper explores a number of dimensions of the accountability processes of governments. Accountability is associated with giving reasons for conduct for responsibilities or authority granted. A key argument of this paper is that governments make themselves accountable but only in a political, rather than managerial sense, resulting in, paradoxically, increasing, rather than decreasing forms of control over society. Due to their unique position in society, where their very existence is dependent upon them exercising control over other parts of society, anything they do has a controlling outcome. Coupling this with a lack of day by day control by the voting public, who have power to elect these bodies in western democracies but not a power to dictate practical action, leaves governments in a uniquely powerful position. Partly to avoid the searching questions from the public, resulting in more detailed forms of political accountability, and, following the logic of the paper, increasing control, governments have seen it appropriate to set up separate internal bodies (such as the auditor generals and the national audit offices) to demonstrate that they are subject to investigation. However, a further key argument of the paper is that, rather than providing an independent voice, auditor generals and the national audit offices provide legitimation to the original actions rather than a curtailment of these processes. The paper builds this complex argument conceptually and empirically. At a conceptual level it draws from a number of different literature bases to provide a “middle range" (Laughlin, 1995) theoretical schema. This is then amplified and developed through an empirical case in connection with the UK’s Private Finance Initiative.
Allyson M Pollock - One of the best experts on this subject based on the ideXlab platform.
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Private Finance Initiatives during nhs austerity
BMJ, 2011Co-Authors: Allyson M Pollock, David A Price, Moritz LiebeAbstract:Allyson Pollock , David Price , and Moritz Liebe believe that ring fencing of Private Finance Initiative payments prioritises investor returns over patient care and call for tighter
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do ppps in social infrastructure enhance the public interest evidence from england s national health service
Australian Journal of Public Administration, 2010Co-Authors: Mark Hellowell, Allyson M PollockAbstract:This article outlines and critiques the main fiscal and economic rationales for the Private Finance Initiative – by far the dominant form of public-Private partnership in the United Kingdom (UK) – and examines the impact of the policy on the long term financial viability of the National Health Service. It shows that the interest rate on Private Finance contains a significant element of ‘excess return’ to investors, and there is no evidence that this ‘excess cost’ to the public sector is offset by greater efficiency through the contracting process. It concludes that the Private financing of public capital investment is highly problematic – and can have a serious impact on the Finances and capacity of public authorities. Since 1992, the UK’s Private Finance Initiative (PFI) has involved the Private sector in the financing and building of public infrastructure and the delivery of related services. This article starts by outlining the motivations and rationales underpinning the implementation of PFI in the UK. It argues that PFI is one expression of the philosophical preference among successive governments for enlarging the Private sector’s role in the economy, and is driven by a (related) ideological belief in the inherent superiority of Private over public models of investment and service delivery in addition to a political imperative to deliver high levels of capital investment into social and economic infrastructure while maintaining the appearance of a tight fiscal stance. Both Labour and Conservative governments have argued that PFI enhances the public interest through the provision of additional resources for public investment, and delivering infrastructure and servicesmoreefficiently than the available alternatives, such as public procurement. The contention of this article is these arguments are flawed. Investment through PFI cannot, in and of itself, lead to fiscal savings; and the economic case for the method is based on false assumptions and misleading evidence. If the economic and fiscal arguments for PFI are not justified, the key question becomes: what is the real impact of this procurement model on the public interest? The bulk of this article provides an evaluation of the impact of PFI on the health system in England, the National Health Service (NHS), a component of the public sector in which public interest considerations ought to be at the fore of decisionmaking. We show that, far from enhancing the public interest, the effect of PFI has been to reduce NHS capacity, thereby threatening its ability to meet need.
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non profit distribution the scottish approach to Private Finance in public services
Social Policy and Society, 2009Co-Authors: Mark Hellowell, Allyson M PollockAbstract:This article provides an analysis of the Scottish Government's approach to the use of Private Finance in public services. It examines the budgetary drivers behind the policy in Scotland and assesses its cost-efficiency. In doing so, it considers first the standard Private Finance Initiative (PFI) model, and then turns to the ‘non-profit distributing’ (NPD) model – a variant of PFI developed in Scotland and one that is, at the time of writing, unique to the country. It concludes that, while NPD provides the Government with an important political benefit, in being seen to safeguard the ‘public interest’ while working within UK-wide budgetary constraints, the decision to continue with Private Finance carries a high economic cost.
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the Private financing of nhs hospitals politics policy and practice
Economic Affairs, 2009Co-Authors: Mark Hellowell, Allyson M PollockAbstract:This article outlines and critiques the main fiscal and economic rationales for the Private Finance Initiative and examines the impact of the policy on the long-term financial viability of NHS trusts. It concludes that the PFI funding of capital investment is highly problematic. Its high costs can have a negative impact on the Finances of health systems.
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an examination of the uk treasury s evidence base for cost and time overrun data in uk value for money policy and appraisal
Public Money & Management, 2007Co-Authors: Allyson M Pollock, David J Price, Stewart PlayerAbstract:UK government procurement policy rests on Treasury claims that the Private Finance Initiative (PFI) has reduced cost and time overruns. We review the five studies cited by the Treasury in support of this claim and find that only one purports to compare PFI with traditional procurement. The results of this single study are uninterpretable because of selection bias, small sample size (only 11 out of 451 PFI projects are included) and fundamental flaws in the analysis. There is thus no evidence to support the Treasury cost and time overrun claims of improved efficiency in PFI. We conclude that Treasury appraisal guidance, the ‘Green Book’ which compares PFI with other methods of procurement, is not evidence based but biased to favour PFI.