Home' Future Building: The Australian Infrastructure Review : December 2011 Contents The changing
PPPs – or Privately
Financed Initiatives as
they are known in the
United Kingdom – have
been under fire in Britain
in recent times. But a
clearer pipeline of new
developments and a
stream of projects have
led to quiet optimism
about the market’s
Volume 2 Number 2
A stream of shrill media scrutiny would
have you believe that the United Kingdom’s PFI
programme is dead and, moreover, that it should
be. But the scale of investment required in the
United Kingdom’s infrastructure – and a strong and
growing focus from Westminster’s policymakers on
using infrastructure investment to boost flagging
economic growth and productivity – means that
a rebranded PFI market is likely to surge ahead.
Lessons will be learnt from the old PFI programme
and a fresh strategy is set to be put into action.
Prime Minister David Cameron vowed that the
Government was on an ‘all-out mission to unblock
the system and get projects underway’.
And even while negative political reviews have
been underway on specific PFI projects (particularly
some school and hospital projects), the UK
Government has continued to turn to private capital
to finance public projects as it moves to renew
utility, economic and social infrastructure assets.
The role for private finance looks set to expand,
rather than contract, as the United Kingdom battles
savage reductions in revenue amidst a deepening
European financial crisis.
And the appetite from the private sector remains
strong, according to the UK Treasury.
Infrastructure UK, set up in 2009 as a unit
of Her Majesty’s Treasury to oversee national
infrastructure priorities, is aiming to streamline
approval processes and tap private sources of
capital, including the country’s hundreds of
small pension funds linked to local councils, says
Doug Segars, head of financial markets group for
With a combined £200 billion (A$308 billion)
in spending on new schools, hospitals and wind
farms likely from the private sector and Government
by 2015, the United Kingdom is keen to keep pace
with other countries with more nimble processes in
its bid to meet renewable energy targets, improve
productivity and provide services for its citizens.
‘The challenge for Government is to look
at what it can do to encourage investment. The
challenge is how do we make the UK relatively
more attractive?’ says Segars.
‘We’re looking at the planning and the
consenting system to make sure it’s as efficient as
possible, while maintaining the protections that it’s
there to provide, but streamlining it.
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