The report from the joint study, which is set to be published later today, has revealed that nearly thirty years after the government turned to the private sector to help build the Channel Tunnel in a bid to boost trade, the hybrid projects – which are more expensive and no more efficient than government-procured projects – are still failing to provide value for money.
The findings are set to come as a blow to the government process – which has £29.9 billion of PPP liabilities on the balance sheet – as it had specifically set “value for money” as the main objective for both PPP and its successor programme, Private Finance Initiatives (PFI).
Professor Graham Winch, from Manchester Business School, said: “The value-for-money case for PPP in the public sector has yet to be proven.
“The benefits gained from the availability of 'extra' finance, the transfer of risk from public to private sector, and improvements in decision-making processes are too nebulous to provide any certainty that they outweigh all the known problems.
“PFI has undoubtedly allowed the UK to acquire more social infrastructure earlier, and this has stimulated short-term economic growth, but it has led to an overhang of debt in the shape of commitments to unitary charges stretching some 30 years into the future and constraints on the flexibility of public bodies in using their infrastructure.”
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