PPPs in decline ?
There’s been quite a bit happening in relation to Public Private Partnerships, most of it suggesting a diminished role for this kind of financing. Queensland has issued new guidelines, partly in response to criticism of the fact that there has so far been only one major PPP project approved (and that only just scraped in). The criticism is understandable: a lot of people in the financial sector are missing out on really big money every time the government decides to go with simple low-cost bond financing. It’s striking though, that the only state with no reason to reduce measured debt levels (Queensland has positive net financial worth) is also the one that has found hardly any PPP offers meeting the value for money criterion. It seems pretty clear that at least some evaluation processes in NSW and elsewhere have been corrupted by the determination of the parties to do a deal regardless of the economics. The recent NSW Parliamentary Public Accounts Committee report on PPPs doesn’t say this, but it certainly raises plenty of concerns about opaque processes.
Meanwhile, in the UK, it seems to be two steps forward and one step back. The nonsensical idea of an all-in-one contract for schools, in which construction is bundled with provision of “soft services” like procurement and HR is mercifully being abandoned, but new forms of PFI/PPP, such as Building Schools for the Future are emerging. The pernicious features of these “innovations” will no doubt become apparent in time, but for the moment, the Blairites are still keen.