In 1992, the UK government introduced the Private Finance Initiative (PFI), primarily as a means of bringing greater discipline to the procurement of public infrastructure. Under this policy, the private sector was engaged to design, build, finance and operate infrastructure facilities.

While the UK government was not the first to experiment with this form of procurement, with the election of the Labour Government in 1997, it developed a more comprehensive policy framework than any other government, and through its application as part of a major programme of capital investment, it was able to develop the model much further. The UK has thus become the model for other PPP (public-private partnership) programmes around the world.

This section brings together the key documents which describe the evolution of this policy.

(Please note: links on this page will open the page in a new browser window)

Lessons from PFI and Other Projects (Web Page)
National Audit Office (NAO), 2011

This report reviews the lessons from the large body of experience of using PFI with a view to improve other forms of procurement and help Government achieve its aim of securing annual infrastructure delivery cost savings of £2 billion to £3 billion.

Financing the PFI Projects in the Credit Crisis and the Treasury's Response (PDF)
House of Commons Public Accounts Committee, 2011
The Stationery Office
This Committee report examines the Treasury on its response to financing PFI projects in the credit crisis.


UK

Private Finance Projects and Off-balance Sheet Debt: Report (PDF)
House of Lords Economic Affairs Committee, 2010
The Stationery Office
This report analyses the large and growing number of privately financed public projects in the UK.

UK

Private Finance Projects and Off-balance Sheet Debt: Evidence (PDF)
House of Lords Economic Affairs Committee, 2010
The Stationery Office
This 320-document informed the Committee's report into the large and growing number of privately financed public projects in the UK. This report is also in this online library.

UK

Private Gain and Public Loss: the Private Finance Initiative and the Norfolk and Norwich University Hospital (A Case Study) (PDF)
Chris Edwards, 2009
University of East Anglia (UEA)
This report analyses the Private Finance Initiative (PFI) in the hospital sector in the UK, with particular reference to the Norfolk and Norwich University Hospital (NNUH), one of the earliest and biggest PFI hospitals.

UK

Making Changes in Operational PFI Projects (PDF)
House of Commons Committee of Public Accounts, 2008
The Stationery Office
A report on the management of changes to operational PFI projects. It assesses the staff used to manage changes, the reasons for not putting out larger changes to competitive tender, management fees and the value for money of small changes.
HC 332
UK

The Simple Micro-Economics of Public-Private Partnerships (PDF)
Iossa, Elisabetta and Martimort, David, 2008
CMPO, University of Bristol
This academic study rather belies its title in building a unified theoretical framework to analyse optimal incentivisation in PPPs. It concludes that PPP arrangements can bring efficiency gains but only in the right circumstances - these circumstances are then identified and analysed in detail.

UK

The Value of PFI: Hanging in the Balance Sheet? (PDF)
Public Sector Research Centre, 2008
PricewaterhouseCoopers
An evaluation of the Private Finance Initiative model in light of the UK Government's decision to adpot International Financial Reporting Standards and thus bring most projects on balance sheet.  

UK

Infrastructure Procurement: Delivering Long-Term Value (PDF)
HM Treasury, 2008
The Stationery Office
A report which sets out the Government's strategy for securing value-for-money in major asset and long-term services provision.

UK

HM Treasury: Tendering and Benchmarking in PFI (PDF)
Public Accounts Committee, House of Commons, 2007
The Stationery Office
This report examines whether issues around PFI tendering which were flagged up by the PAC in 2003 are being addressed. It also considers the early experiences of the few PFI projects to have carried out value testing by summer 2006. It finds that the PFI procurement process has not improved since that 2003 report - increased competitiveness in the market is essential for the rewards of PFI to be reaped.

UK

Going Global: the World of Public Private Partnerships (PDF)
Confederation of British Industry (CBI), 2007

This report outlines how PPPs have developed in the UK - and what lessons can be learnt by other countries seeking to make use of new partnerships to reform their public services. It also suggests that Britain can in turn learn from the experience of PPPs in other countries, arguing that this will help improve quality of service and value for money delivered at home. 

UK

Retreat from Reform - The Initial Policy Decisions of the New Government (PDF)
Bosanquet, N. et al, 2007
2007
This report analyses the first policy wave following Gordon Brown's appointment as UK Prime Minister, examining key public services - including health, education and housing - as well as the opposition parties' alternative policy solutions. It concludes that initial decisions have put public service reform into retreat with a reversal of previous rhetoric on decentralised, bottom-up provision.  It argues that policy announcements on the NHS, schools, universities and housing will not only increase public spending but also reduce efficiency.



UK

Building on Success: The Way Forward for PFI (PDF)
Confederation of British Industry (CBI), 2007

This report examines the use of PFI over its full life-span (1992-2007) and argues have extensive savings and efficiencies have been reaped by the public sector. The report identifies five key reasons for PFI's success, and outlines a number of policy recommendations, including improved public procurement so that improved value for money can be delivered in the future.
978 0 85201 668 8
UK

Benchmarking and Market Testing the Ongoing Services Component of PFI Projects (PDF)
National Audit Office, 2007
The Stationery Office
This report examines early examples of benchmarking and market testing techniques in measuring the value of PFI contracts in public services. It finds that value for money has been achieved through value testing in about half of cases. In other cases - including some where the private sector negotiated price increases during these processes - the data are uncertain on whether value for money has been achieved.

UK

Improving the PFI Tendering Process (PDF)
National Audit Office (NAO), 2007

This study examines the tendering process for PFI projects following concern that it does not follow best practice and has been poorly handled by the public sector. The report finds that there are various areas for significant improvement and makes a series of recommendations with a view to realising these potential gains.


ISBN: 9780102944563
UK

Next Steps: Priorities for Improving Public Services (PDF)
Confederation of British Industry (CBI), 2007

This pamphlet outlines the priorities the CBI believes must be addressed in the ongoing process of public service reform in the UK. It challenges government to make a commitment to nine key pledges which seek to integrate the needs and aspirations of service-users and service-providers while meeting social and environmental responsibilities.

UK

PFI: Strengthening Long-term Partnerships (PDF)
HM Treasury, 2006
The Stationery Office
This report was released by the Treasury as part of the UK Budget 2006 documentation. It confirms a continuing role for the PFI in the delivery of modernised public services where it represents value for money, and sets out plans for the launch of a new PFI Operational Taskforce within Partnerships UK.
ISBN-10:1-84532-137-5
UK

Report on Operational PFI Projects by Partnerships UK (PDF)
Partnerships UK, 2006

A review of the performance of PFI projects during their operational phase, covering a wide range of operational issues impacting on all projects from all sectors that were known to be operational at the end of March 2005.

Building Flexibility: New Delivery Models for Public Infrastructure Projects (Web Page)
Deloitte, 2006

This Deloitte report evaluates the PFI and LEP/LIFT models, and describes the conditions in which they are likely to work best. It proposes five new delivery models which Deloitte believes have the potential to offer improved outcomes in situations where neither PFI nor LEP/LIFT is suitable.

UK

Effectiveness of Operational Contracts in PFI (PDF)
Stevens, Mike and Rose, Norman, 2007
KPMG LLP
This report covers the findings of a survey commissioned by KPMG and the Business Services Association (BSA) of PFI projects in the operational phase.

UK

Exploring the relationship between Accountability and Performance in the UK's Private Finance Initiative (PFI
Demirag, Istemi; Dubnick, Melvin J; Khadaroo, Iqbal, 2004
School of Management and Economics, Queens' University, Belfast


UK

The Future of the Private Finance Initiative (Web Page)
Rossiter, Ann (Ed), 2004
Social Market Foundation (SMF)
In 2004 the SMF held a series of seminars examining the markets for PFI and how these might be improved, including better procurement practices, contract-development and the optimal scope of PFI in the future. This report covers the findings and is available for free download via this link.
ISBN 1-904899-15-5
UK

Public Finance/Infrastructure Finance: Credit Survey of the U.K. Private Finance Initiative and Public-Private Partnerships
Standard & Poor's, 2003

This is a review of the credit issues affecting the Private Finance Initiative (PFI) and Public-Private Partnerships (PPP) in the UK.

UK

PFI: Meeting the Investment Challenge (PDF)
HM Treasury, 2003
The Stationery Office
This report examines the use of the PFI, project performance and policy issues. It contains chapters on performance monitoring, payment mechanism and other relevant areas such as flexibility.

UK

The Private Finance Initiative (PFI)
Allen, Grahame, 2003
House of Commons, Economic Policy and Statistics Section
This paper looks at the origins of the PFI, expenditure on PFI projects and disscusses the arguments for and against the PFI by looking at some of the current topics of interest.
ISSN 1368-8456
UK

UNISON Evidence to the IPPR Commission on Public Private partnerships: Section III - Public Finances, Value for money and contract design, Section VII - Cross-cutting issues
UNISON, 2000

ippr's commission on public private partnerships ran from 1999 until 2001, bringing together leading figures from business, government, academia and the trade unions in search of a consensus on the role of the private sector in delivering public services. This document represents the contribution of UNISON, the largest trade union in the United Kingdom.

UK

Value for Money Drivers in the Private Fianance Initiative
Andersen, Arthur and Enterprise LSE, 2000
Commissioned by the Treasury Taskforce (UK)
This is a report undertaken by Arthur Andersen and Enterprise LSE who were appointed by the Treasury Taskforce (TTF) to examine value for money aspects of PFI projects which had started operations.  The report identifies a number of successes of PFI and also makes recommendations from the experience of PFI and a survey of public sector project managers.

UK

The PRIME Project: The Transfer of the Department of Social Security estate to the Private Sector (Web Page)
National Audit Office (NAO), 1999
HC 370 of Session 1998-99.
This report looks at the progress and effects created by transferring ownership and management of almost all property estate from the Department of Social Security to a private sector consortium, Trillium.  The report also suggests improvements that should be made to estate management resulting from the deal. 
ISBN: 010264599X
UK

The Benefits of PFI
KPMG and The Major Contractors Group, 1998

Six years after the initial PFI contracts were agreed, this report outlines the benefits on offer to governments adopting this model in procuring public services.

UK

The Private Finance Initiative: The First Four Design, Build, Finance and Operate Roads Contracts (Web Page)
National Audit Office (NAO), 1998
HC 476, Session 1997-98
This report examines the four PFI contracts for Design, Build, Finance and Operate roads let by the Highways Agency, an Executive Agency of the Department of Transport.  It outlines the gains made from the contracts and also suggests improvements. 
ISBN: 0102847983
UK

Local Government PFI In England: Criteria for Allocation of "PFI Credits"
Department for Transport, Local Government and the Regions, 1998

This document extensively outlines the criteria recommended for implementing PFI in various sectors.  Some of the government departments for which information is detailed on include the Home Office, the Department for Health and the Treasury.

UK

The PFI Contracts for Bridgend and Fazakerley Prisons (Web Page)
National Audit Office (NAO), 1997
HC 253, Session 1997-98
This report by the Comptroller and Auditor General looks at the progress of the Bridgend and Fazakerley prisons, the first PFI prisons to be let.  Looking at evidence from the Prison Service, it analyses the costs and benefits of the PFI solutions compared with alternative forms of procurement.
ISBN: 0102765987
UK

Review of PFI (Public/Private Partnerships) Summary and Conclusions
Bates Review, 1997

This review examines the success of PFI schemes.  It also outlines recommendations for better organization in PFI.  In particular, the review recommends specific measures to reinvigorate and streamline the process undertaken by PFI schemes.

UK

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