The government’s cuts to capital spending over recent weeks will have come as a surprise to no-one. However, rather than claim that this means the end of models such as the Private Finance Initiative, public-private partnerships or Local Improvement Finance Trusts (LIFT), it actually means the opposite - as without these vehicles the future for the public sector is indeed bleak.
New developments will inevitably continue to be needed as some existing premises – be they in health, education or other areas of the public sector – will simply not be able to meet the changing demands placed on them. Consequently, while the public purse might have less in it, there will still, and indeed always, be a need for new builds.
However, all involved in capital projects must accept that there will be even more rigorous criteria applied to any projects requiring funding from the public purse, and that the private sector is going to have to shoulder a significant amount of the burden for future developments.
Therefore, the challenge is to find ways of delivering the new facilities that are required by making better us of what already exists. This challenge offers significant opportunities for partnership models that can meet this need. Achieving best value will require significant asset management expertise that is readily available within the private sector, and which models such as Lift have an excellent track record in bringing to capital development.
The challenge for those in the partnerships industry will be to evolve. For some this will be easier than others. To take the Lift model as an example, the individual and local Lift companies that have developed more than 260 facilities across the country have access to formidable asset management experience and an established supply chain that can be deployed to get best value from the existing estate.
In the case of primary healthcare, Lift’s historic focus, this offers the opportunity to shift the burden of facilities management from clinical staff and commissioners, enabling them to focus on improving clinical care and patient outcomes but at a lower cost.
Equally, as an already fully procured model for asset management across health and local authorities, there is no barrier to Lift companies extending their services to facilities in other policy areas – perhaps potentially ensuring best value from school estates, or the effective management of community facilities that co-locate facilities.
Suggestions of the demise of long-term Lift-type joint venture models ignore the reality that such vehicles are the only way of facilitating the change in service provision that is so critically needed. The current period is one of evolution for both public and private organisations, in which those able to successfully navigate the transition from a primary focus on new developments to delivering overall best value from the existing estate will allow them to provide much needed solutions both now and in the future.
David Pokora is the executive director of the Lift Council, the representative body for organisations involved in Local Improvement Finance Trusts
