PFI (Private Finance Initiative)/PPP (Public Private Partnerships) and procurement

What is PPP?

Public Private Partnerships (PPPs) should focus on promoting efficiency in public services. This can be done through risk sharing and utilising private sector expertise. Sources of capital which can be offered by the private sector can also relieve the pressure on public financing which is increasingly required.

There are numerous forms of PPP creating a family of procurement methods. The more traditional forms are:

1. •

   conventional procurement

2. •

   PFI/PF2

3. •

   partnerships such as Local Improvement Finance Trusts and Local Education Partnerships

4. •

   concessions, and

5. •

   Public Delivery Organisations

The newer/alternative forms of PPP are:

1. •

   joint ventures

2. •

   alliancing

3. •

   hybrid PPPs, and

4. •

   other models defined in the Government Construction Strategy Report (see guidance)

The best examples of the hybrid structures are:

1. •

   the NHS Local Improvement Finance Trust ('LIFT') which dealt with GP surgeries and health centres, and

2. •

   the Building Schools for the Future