PFI/PPP is mainly applied by governments to projects which require regular, on hands maintenance. However, PFI/PPP may not be used for any kind of projects.

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Emma Booker                DP1 B&M

Like any concept introduced, it comes with both advantages and disadvantages. PFI/PPP being one of the most controversial issues of today. One of the most common features of PFI/PPP is that costs keeps increasing and therefore not feasible at times to continue with the project and therefore the big question stands as ‘should time, effort and money really be invested in PFI/PPP?’

PFI/PPP is mainly applied by governments to projects which require regular, on hands maintenance. However, PFI/PPP may not be used for any kind of projects. These projects are large scaled projects and that have a certain degree of complexity. The UK Government has embraced the idea of PFI/PPP for many different reasons. The first most popular reason being PFI/PPP helps to deliver high quality public services and ensure that public assets are delivered on time and to budget. PFI/PPP introduces competition between contractors, its goal here being to establish the market mechanism into the process of providing facilities. Secondly, the private sector is known for lacking efficiency, by bringing forward PFI/PPP, the private sector is able to provide taxpayers value for their money. PFI/PPP really motivates the private sector companies. Whilst using this method, individuals are able to come up with bigger and greater ideas with huge potential. PFI/PPP enables the risks to be shifted from the public sector to the private sector, which in the long run, is far more beneficial. PFI/PPP allows the government to be very flexible with when it wants to build new public words. The project timing does not depend on the government’s cutbacks and budgets, which in any other government that has not adopted the concept of PFI/PPP would require stable finances. It also decreases the amount that government has to borrow which brings down the UK’s public dept to its gross domestic product ratio. One of the greatest benefits of PFI/PPP is that the capital investment is kept off of the monthly balance sheet, which enables the government to its fiscal rules, which depicts that the government is sticking to a reasonable and realistic budget. As management is done by the private sector, this increases the accountability, which results in greater efficiency.

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As mentioned before, where there are pros, there are cons. Some say that the advantages and disadvantages of PFI/PPP cancel each other out. Others beg to differ. The first argument that shows how complex a PFI/PPP may be to operate is the very famous example of Health Trust. Many find is unwise for the Health Trust to enter itself into such a long-term contract. Changes in individuals demand and unforeseen events that will occur in the future, may result in severe restrictions in resources used and provided if health authorities are tied down to a PFI/PPP contract. The ...

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