Abstracts: March 22nd, 2006

A report from Deloitte on the future of infrastructure development in the public sector argues that current PFI structures are unlikely to address all of the challenges of future infrastructure requirements. A broader and more flexible range of approaches needs to be considered in order to deliver critical policy objectives. There is increasing uncertainty over the way in which the provision of public services will be managed, and policy and accounting changes are putting increasing pressure on the current models used for their delivery.The PFI is best suited to large projects in conditions of relative certainty. The LIFT (NHS) and Local Education Partnership models can extend the reach of PFI, but concerns have been expressed regarding their value for money due to a lack of competitive pressure. Importantly, there are significant risks from using either of these models where there is real uncertainty about the nature of future requirements. The Deloitte report analyses several new models which are emerging to help address challenges currently facing the delivery of infrastructure projects include PFI schemes in which the public sector underwrites some of the financial risk.

The report is available by email from: jouvry@deloitte.co.uk