\n<\/p>\n
Labour is preparing to kick off a new wave of public-private partnerships (PPPs) in England to build the neighbourhood health centres at the heart of its NHS 10-year plan.<\/p>\n
Ministers will make a final decision in the autumn budget about whether to use the funding approach, which was put on pause eight years ago.<\/p>\n
But critics say lessons have not been learned about the pitfalls of PPPs, and point to the chaos unleashed by the 2018 collapse of the mega-contractor Carillion, with its complex portfolio of projects.<\/p>\n
While it was originally conceived under the Conservatives, Tony Blair\u2019s Labour government made significant use of the private finance initiative (PFI), a form of PPP used to build schools, hospitals and other public infrastructure, without adding to the national debt.<\/p>\n
Backers of PFI say this approach allowed public infrastructure to be built that otherwise would not exist; but opponents say the taxpayer was often left footing huge bills for inflexible contracts that ran for as long as 30 years.<\/p>\n
Treasury data shows that 560 PFI contracts are outstanding in England, for projects including schools, hospitals, libraries and road maintenance. Hundreds of these contracts will end in the coming years, raising questions about the state of the assets being inherited by the taxpayer, and potentially triggering legal battles about the precise conditions of \u201chandback\u201d.<\/p>\n
A report last year from the Association of Infrastructure Investors in Public Private Partnerships (AIIP), chaired by the Labour peer and former frontbencher John Hutton, warned of the risk of \u201cserious disruption\u201d as these deals come to an end, amid what it called \u201cmistrust between the parties to some PFI contracts\u201d.<\/p>\n
Rachel Reeves will be under no illusion about the pitfalls of PPP, having chaired the House of Commons business select committee when MPs examined the fate of Carillion, which was enmeshed in a number of PFI deals as well as being a direct contractor to government.<\/p>\n
However, the government is under pressure to transform the UK\u2019s crumbling public services, with limited resources, and recent announcements have made clear that ministers are ready to dip their toe into this controversial area.<\/p>\n
The 10-year infrastructure strategy, published in June, said the government would \u201cexplore the feasibility of using new PPP models for taxpayer-funded projects (for example in decarbonising the public sector estate and in certain types of primary care and community health infrastructure) in very limited circumstances where they could represent value for money\u201d.<\/p>\n
Scotland and Wales have developed their own, alternative approaches to public private partnerships, called \u201cnon-profit distributing\u201d partnerships and the \u201cmutual investment model\u201d respectively.<\/p>\n
Darren Jones, chief secretary to the Treasury, says reviving PPP in England could \u201callow us to do more, quicker, than you would otherwise be able to do\u201d.<\/p>\n
He is clear that that includes neighbourhood health centres, which are meant to transform NHS care by shifting more treatment out of hospitals. The NHS 10-year plan made a commitment to \u201cdevelop a business case for the use of public private partnerships for neighbourhood health centres, ahead of a final decision at the autumn budget\u201d.<\/p>\n
Jones said: \u201cWe\u2019ve got the new hospital programme building stuff, which is obviously huge. We\u2019ve got the maintenance backlog, which is huge. We\u2019ve chosen to invest a lot in technology to improve productivity and diagnostics and all that type of stuff. And you don\u2019t have an infinite budget. So if there\u2019s an innovative way of delivering a key objective for us, that\u2019s what we\u2019re trying to make happen.\u201d<\/p>\n
Nevertheless, there is some anxiety inside and outside government about the risks attached to potential contracts, even if they are much more narrowly conceived than the mega-projects of the Blair years.<\/p>\n
When the NHS 10-year plan was launched, Unison\u2019s general secretary, Christina McAnea, warned: \u201cBasing any funding on a failed market system and expensive private finance model would be a major error, especially with money so tight.\u201d<\/p>\n
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Sign up to Business Today<\/span><\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: <\/strong>Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.<\/span><\/p>\n after newsletter promotion<\/p>\n The legacy of previous waves of public private partnership is complex. Research this year, by the economist Max Mosley, then at the National Institute of Economic and Social Research, looked at 1,000 schools built through PFI. It found that \u00a313.5bn was being spent at local level on repayments, 31% of which was going on interest.<\/p>\n Mosley, now at the New Economics Foundation, said: \u201cWhen PFI projects failed it carried devastating consequences, from huge costs levied on hospitals, to state-of-the-art schools having to close down.<\/p>\n \u201cClarity is crucial. We need to understand what types of services are in scope, how risk will be managed, and how the mistakes of the past will be avoided.\u201d<\/p>\n Backers of PPPs argue that the assets being handed back to the public sector when decades-long contracts come to an end are in better condition than crumbling public buildings whose upkeep has been left to the taxpayer.<\/p>\n A recent National Audit Office report on the use of PPPs to fund public infrastructure called for a series of changes, including better sharing of risk between taxpayers and investors. \u201cDepartments should assess risks, determine who is best placed to bear them, and design agreements that clearly establish the corresponding risk allocation,\u201d said one recommendation.<\/p>\n Hutton, of the AIIP, said that \u201cdespite the myths\u201d, PFI had delivered \u201chundreds of schools, hospitals and health centres that would have never otherwise been built, with ringfenced maintenance\u201d.<\/p>\n He added: \u201cPPPs operate in every other western economy. By applying the lessons learned and harnessing technology to reduce complexity and avoid disputes, PPP can rebuild our vital public services with buildings that will stand for decades to come.\u201d<\/p>\n Labour has set up a new body, the National Infrastructure and Service Transformation Authority, to be the government\u2019s centre of expertise on these issues, though sceptics argue that it is more of a rebranding exercise than a significant beefing-up of resource.<\/p>\n Iain Murray, the director of public financial management at Cipfa, the professional body for public sector finance experts, said it was understandable that PPP was back on the table but that its success would depend on learning the lessons from earlier generations of projects.<\/p>\n \u201cA lot of these deals were modelled in [a] low-inflation, low-interest-rate environment and all of a sudden the world turns on its head \u2013 and that\u2019s not just about the money, it\u2019s about the services they\u2019re providing to the public,\u201d he said. \u201cHow do you build that flexibility in? Is there a way you can think about structuring those deals to get the kinds of outcomes you want?\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Labour is preparing to kick off a new wave of public-private partnerships (PPPs) in England to build the neighbourhood health centres at the heart of its NHS 10-year plan. Ministers will make a final decision in the autumn budget about whether to use the funding approach, which was put on pause eight years ago. But<\/p>\n","protected":false},"author":1,"featured_media":16797,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48],"tags":[1271,311,116,134,4029,1229,328,6784,10058],"class_list":{"0":"post-16796","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-politics","8":"tag-economic","9":"tag-england","10":"tag-funding","11":"tag-labour","12":"tag-model","13":"tag-nhs","14":"tag-policy","15":"tag-preparing","16":"tag-publicprivate"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/16796","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16796"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/16796\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/16797"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16796"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16796"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16796"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}