Reform of the Private Finance Initiative
The government is today launching a call for evidence on the reform of the Private Finance Initiative (PFI).
The government is today launching a call for evidence on the reform of the Private Finance Initiative (PFI). All interested parties are invited to respond to a call for evidence on the reform of PFI and to bring forward proposals for a new approach to using the private sector in the delivery of public assets and services. In particular, feedback is sought from industry participants with an active role in the delivery and operation of public facilities; from those with an interest in investing in these projects; and from across the public sector, academics, think tanks, employees and wider stakeholders.
Central to the development of new delivery models are the objectives of long term value for money for the taxpayer, more effective use of private sector innovation and skills, reducing costs, improving flexibility and increasing transparency. The Treasury will also be looking to retain the benefits that successful PFI can deliver - in getting projects built to time and to budget and increasing the correct disciplines and incentives on the private sector to manage risk effectively.
The government’s aim is to balance these objectives in a new approach to the delivery of public facilities that:
- is less expensive and uses private sector innovation to deliver services more cost effectively;
- can access a wider range of financing sources, including encouraging a stronger role to be played by pension fund investment;
- strikes a better balance between risk and reward to the private sector;
- has greater flexibility to accommodate changing public service needs over time;
- maintains the incentive on the private sector to deliver capital projects to time and to budget and to take performance risk on the delivery of services;
- delivers an accelerated and cheaper procurement process; and
- gives greater financial transparency at all levels of the project, so that the public sector is confident that it is getting what it paid for and that the taxpayer is sure it is getting a fair deal now and over the longer term.
Notes for Editors
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The Chancellor announced the government’s intention to reform PFI on the 15 November 2011.
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The call for evidence document on the reform of the PFI can be found on the PFI reform: Call for evidence page. The document sets out suggested areas of focus for the call for evidence, but respondents are encouraged to submit responses on other areas that they consider important, including proposals for alternative delivery models.
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Responses to the call for evidence should use the response template available on the PFI reform: Call for evidence page and be emailed to PFIevidence@hmtreasury.gsi.gov.uk or sent to the PPP policy team, Room 2/S1, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ.
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Responses to the call for evidence should be made by Friday 10 February 2012. The Treasury will consider the evidence received and may, where appropriate, follow up on stakeholders ideas through further engagement to obtain further detail.
Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hmtreasury.gsi.gov.uk
Media enquiries should be addressed to the Treasury Press Office on 020 7270 5238.