The Bartlett


An empirical approach to PFI

Since the 1990s, the UK government’s encouragement of private investment in public facilities such as hospitals, through the private finance initiative (PFI), has been the focus of much debate.

Bartlett research has provided an objective and independent commentary on PFI’s use, and formed the basis of training for practitioners.

Assessing the use of PFI

A team of Bartlett researchers set out to assess the use of PFI and public–private partnerships (PPPs) generally.

They first considered the financing throughout the full project lifecycle, from creation to sustained operational use through the contractual integration of the design, build, operation and financing of a facility.

In further work in 1998, Dr Edkins and his colleague Graham Ive found there was no overwhelming evidence of cost saving, and that the incentive to innovate depended on the level of competition during bidding.

Publications they produced for the Construction Industry Council provided the first significant unbiased and research-based explanation for professional service firms in the construction industry.

Training courses

Drawing on this body of work, the researchers developed training courses and reusable training materials for practitioners.

Participants on their bespoke training programme applied findings to ‘live’ PFI/PPP projects, developing into a cohort of professional project directors with transferable skills.

In 2009, the course received the Association for Project Management BNFL Award for providing the greatest contribution to the development of project management.

The Infrastructure Intelligence Club

Further research with KMPG answered requests from government and central agencies for a better, more evidence-based analysis of the performance of privately financed projects.

Through this project, a collaborative network, the Infrastructure Intelligence Club (IIC), was formed of major players in the UK infrastructure investment and PFI/PPP projects market.

This network advocated for PFI in UK policy and public debate when PFI/PPP was receiving significant negative press attention in the UK. The objective empirical work discussed by IIC members revealed that the overall performance of PFI/PPP schools and hospitals was not as bad as commonly portrayed.

PFI investigations

Public concerns over PFI led to various investigations. This included one in 2012 by the charity Civitas, which moderated its argument against PFI financing based, in part, on the UCL research (for more information, see Civitas’ PFI: Still the only Game in Town?).

A strategic review of PFI/PPP conducted by HM Treasury in 2011–12 considered the UCL analyses and surveyed a number of IIC members. They argued, drawing on UCL evidence, that there were public sector benefits to this type of financing.

In 2012, the Treasury announced plans to modify PFI/PPP and rename it PF2, rather than scrapping it.

International impact

The research has also influenced PFI’s development in New Zealand. The government had historically been wary of using PFI to procure its infrastructure. But following an election in 2008, an embryonic PPP market was established with the announcement of the Transmission Gully road project.

Dr Edkins made contact with the New Zealand Council for Infrastructure Development. He proposed designing and delivering an executive level seminar series. This would provide a strategic overview and insight into PFI, including the wider use of PPPs. Around 200 senior industry and government delegates took part in the workshops, which were supported by the New Zealand Treasury.