The Government is to create a new one billion pound private sector-led body to help increase and improve investment in the UK’s public services from private sources. Partnerships UK will employ City experts to help the public sector get the best deal from the Private Finance Initiative and other forms of public-private partnerships. Partnerships UK will act as a project manager for PFI deals, providing public sector organisations – from Whitehall departments to local education authorities – with expert advisory and implementation skills. The move to set up the company follows from recommendations made by Sir Malcolm Bates in his second report on the PFI.
The new company will itself be formed as a partnership, with the private sector taking a majority stake in a joint venture with central government and with a Board Chairman drawn from the private sector. Public sector bodies thinking of entering into PFI deals will be able to use Partnerships UK on a voluntary basis. It will have no monopoly and will seek to win business on the strength of its expertise.
Partnerships UK will not operate as a bank. Instead, it will provide development funding to get PFI deals off the ground, where existing forms of private finance are not available. In these cases it will provide a range of financial products, tailored to the needs of public sector bodies in the early stages of the procurement process, which enhance, rather than undermine, existing flows of private finance.
A Steering Group will be formed to oversee the development of its business case, to consider governance issues, and to prepare for the raising of private sector capital, which is not expected to take place before March 2000. The Government will appoint financial advisers during this period to advise it on its involvement in the company.
Further information can be obtained from http://www.treasury-projects-taskforce.gov.uk.