PFI projects offer better value for money, say reports

Three-quarters of Private Finance Initiative (PFI) projects were delivered to time and budget against less than a quarter undertaken through conventional procurement, studies by HM Treasury and the National Audit Office have revealed.

Three-quarters of PFI projects also achieved value for money and met with expectations, according to surveys of public sector project managers. 

In another report this year, the Commission for Architecture and the Built Environment concluded that PFI had matured and was capable of delivering high quality public buildings.  

Remedial action has been taken by the Government to improve the management of PFI procurement, involving the pooling of smaller schemes and providing a central team of experienced transactors to support local teams.

Other recent initiatives include the revision of appraisal methods, introduction of new sources of public funding and providing other options for IT procurement.

These studies provide the first major objective evidence on the performance of PFI in the UK.

A new report from International Financial Services London (IFSL) 'PFI in the UK: Progress and Performance' also highlights the extensive reach of the UK's PFI, with 617 project deals having been signed up to November 2003.

These projects had a total capital value of £56bn, although a half of this relates to contracts signed for the London Underground PPP in the last two years.

IFSL is now using this data to support its work in assisting overseas government wishing to learn more about the UK experience.

Over 60 countries around the world are looking at aspects of the UK model to assist them in providing for their infrastructure and public service delivery needs.