The PFI is not the only game in town

9 Mar 06
Councils and Whitehall departments alike should consider adopting more creative alternatives to public infrastructure projects, according to a report from consultancy Deloitte.

10 March 2006

Councils and Whitehall departments alike should consider adopting more creative alternatives to public infrastructure projects, according to a report from consultancy Deloitte.

The report, published on March 10, argues that current Private Finance Initiative structures are unlikely to be flexible enough to meet future challenges, particularly as accounting changes are likely to put these schemes on the balance sheet.

Tom Startup, head of Deloitte's public sector research team and one of the report's authors, told Public Finance that the PFI worked best for long-term projects where there were relatively high levels of certainty about future need.

But he added: 'If there is more unpredictability over hospital income because of the introduction of Patient Choice and payment by results, for example, the PFI may be difficult.'

Deloitte's report sets out five alternative models. These include PFI schemes in which the public sector underwrites some of the financial risk and the 'alliancing' model, which facilitates greater partnership and collaboration.

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