How the Treasury’s new social infrastructure PPP model will work

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The infrastructure strategy has proposed allowing a form of PFI to be used in limited circumstances including healthcare centres for the first time since 2018 – but not yet revealed what the structure will be. Joey Gardiner considers the options

On the first day of the month. the Department of Health and Social Care (DHSC) quietly slipped out a tender  for bidders to come and talk about £1bn of work on the health estate. While the headline figure might already have been enough to get your attention, it was the nature of the procurement that was really startling.

Because this short note kickstarted the first procurement of what is effectively a private finance initiative (PFI) tender process – though you won’t hear the government call it that – in more than 10 years. The note was looking for market engagement around finding someone to design, build, operate, finance and maintain “primary and community health infrastructure projects through a public-private partnership (PPP) model” – ahead of beginning a formal tender process in June next year.

The tender can be seen as a sure sign that the government is serious about using an updated form of private finance to pay for building new social infrastructure, ahead of a promised final decision on the issue in the autumn Budget.

Last month’s government infrastructure strategy  raised the possibility of using PFI-like models in two cases: neighbourhood healthcare centres and decarbonising the public estate. And some more detail on what this might look like emerged in the NHS 10-year plan, published on July 3. However, nowhere has the government said so far exactly what form the PPP will take – though it has repeatedly talked about “learning lessons” from past experiences.

Here, we examine what can be said about what the model will look like, and what the chances are that the scope of any return to PFI could be expanded further?

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