New delivery models for public infrastructure projects

Assessing the alternatives to conventional procurement

Infrastructure development remains at the the heart of the modernisation of UK public services. From the upgrade of secondary schools to the development of new IT systems, the Government has rarely been under such pressure to deliver effective and efficient improvements in infrastructure.

The public sector has always worked with private sector partners to help deliver its infrastructure requirements - typically through so-called 'conventional procurement'. Recent years have seen the private sector play a new role in the Private Finance Initiatives (PFI), and the partnership models of Local Improvement Finance Trusts (LIFT) and Local Education Partnerships (LEP)*. However, these schemes continue to be subject to considerable discussion and debate.

(* This report was published in July 2009).

Improving affordability, competition and flexibility

This report, published in 2009, focuses on assessing the alternatives to conventional procurement. It attempts to evaluate the PFI and LEP/LIFT models and describe the conditions in which they are likely to work best. It also proposes six new delivery models that Deloitte believes have the potential to offer improved outcomes in situations where neither PFI nor LEP/LIFT is suitable:

• The 'De-risked PFI' has the potential to improve value for money
• The 'Integrator' and 'Competitive Partnership' models have many of the advantages of LEP/LIFT but provide more ongoing competitive pressure
• The 'Alliancing' and 'Incremental Partnership' models can be used in situations where uncertainty is great.