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16 March 2018

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Engagement rings

Greater engagement between public and private sectors is a worthy ambition, but needs proper implementation and fast if it is rehabilitate the PPP model in the UK
Engagement rings

The irony in the juxtaposition of two headlines on our daily news bulletin may have been picked up by some readers last week.

Directly under a headline entitled ‘NIC chief urges engagement’ was another headline, announcing: ‘Trust takes PFI to court’. I can’t help but think that wasn’t the kind of engagement Phil Graham had in mind when he published his blogpost on the need for greater “engagement and consultation” between the industry, procurers and the public.

However, it does highlight the difficult position faced by the infrastructure community in the U at present, with little money coming from central government but a constant background of negative stories regarding the use of private finance.

And as we head towards the end of March, things do not look like they will be getting much better.

The Commons public accounts committee has announced it is to hold a review into PFI, using as its base the recent report from the National Audit Office, which did little to support proponents of the model and concluded it could not find sufficient evidence to decide whether PFI and PF2 represented value for money.

Given the mood of parliament in the wake of the Carillion collapse, it is unlikely that the committee will be in any mood to give private finance an easy ride when the inquiry gets underway at the end of March.

Indeed, in the wake of the Carillion situation, one investor told me that the UK PPP market was now at its lowest ever ebb – but with recent events, it could be argued that in fact things have fallen even further. Add into the mix the recent case of Huddersfield Royal Infirmary, where campaigners have won the right to a judicial review of plans to develop a new building using PF2 (albeit on grounds not specifically related to the funding model itself), and things look pretty grim.

So suggesting that more engagement and consultation in the infrastructure industry certainly seems like a good idea. With so much hostility, something certainly needs to be done if any new projects are going to see the light of day in the years to come.

Chancellor Philip Hammond’s upbeat assessment of the economy in his Spring Statement may have been encouraging, but there was clearly no suggestion that the government was about to change course when it comes to spending. If anything, the improvements have been used by Hammond and others to vindicate the austerity mantra – so there will be no new cash for infrastructure projects any time soon.

But the status quo cannot hold.

Housing remains an intractable problem, one in which government efforts have so far barely scratched the surface. And as this winter has shown, the NHS is in desperate need of support. One way of doing that is through unlocking its old, creaking estate.

That will prove difficult to achieve in the current climate: as Robert Naylor recently pointed out, the political times are currently too fragile for his bold plans for London to see the light of day.

It’s a bleak picture, but it is from this low base that the infrastructure industry needs to work with those in Whitehall and local town halls to develop plans that can be properly explained to their constituents, so that new infrastructure can be built, instead of simply being thrown into the ‘too difficult’ and ‘not in my backyard’ boxes.

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Engagement rings

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Greater engagement between public and private sectors is a worthy ambition, but needs proper implementation and fast if it is rehabilitate the PPP model in the UK

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