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PPP: It's not wrong. Its just not right enough, yet

15.11.18

Today we launched a new report, PPP: The Reset, the outcome of months of conversation and consultation with a wide range of private and public stakeholders, as well as civil society. The purpose? To better understand why PPPs are being challenged and questioned and what, if anything, our response should be.

We are passionate about partnership and have long worked with public sector bodies to unlock the value of publicly owned land. We believe in the PPP model. We believe in its potential to deliver the homes, communities and public assets that we so desperately need and to boost productivity in UK cities.

But we are also aware that there is room for improvement.

And so, we started a six-month-long conversation on PPP, gathering key voices in London, Birmingham and Manchester. We listened to representatives from the public, private and civic sector, including Homes England, Berkeley Homes, Birmingham City Council, National Rail, the NHS, London Community Foundation and TfL.

The consultation revealed three key findings:

  1. That there was a significant acceptance of PPP, however, it was a grudging acceptance
  2. That developers’ scepticism towards PPP largely focussed on concerns about how to manage the inherent political risk.
  3. That the brand of PPP was more tarnished than the output it delivers.

Why is PPP so beleaguered with mistrust and misunderstanding? It is probably in part because it is often confused with its similar sounding but now toxic cousin, PFI – an altogether different way of the public and private sectors working together. And perhaps because some PPP projects have failed – for all sorts of reasons. The problems around the Haringey Development Vehicle is but one recent and high-profile example.

So how do we make PPP more robust, more acceptable and less difficult?

Some very clear themes emerged from our conversations and workshops.

Firstly, the need for everyone who recognises the benefits of PPP to work to fix its reputation, because the contamination of the term is undermining the opportunity it presents. Secondly, the need for partners to quickly establish their understanding of the community most likely to be affected and most likely to benefit from a proposed scheme – by involving them from the very beginning and maintaining engagement throughout. And thirdly, the need for all partners to ensure that transparency – and effective scrutiny – sit at the heart of all projects.

Which begs the question: what is U+I doing about this? Isn’t this just talk?

The discussion and debate prompted by our consultation has value and sets us on a journey, and one that we are backing up with actions. Today we announce a set of commitments around the way we deliver PPP projects.

  1. We will establish an independent Community Challenge Panel which will oversee how our schemes are delivered ensuring that we meet the socio-economic standards we set ourselves in delivering for the local community, from completion and then over a five-year period.
  2. We will appoint a new non-executive director to oversee the Community Challenge Panel, which will bring together representatives from the public sector, civic society and other developers.
  3. We will share any profit we make above an agreed projected return with the relevant public partner and local community directly via a Community Profit Share Arrangement.
  4. Community Engagement Fund: On all of our major PPP schemes, we will set aside a specific budget through a Planning Performance Agreement so that community organisations and representatives are better equipped to engage more effectively in the planning process.

What underpins these commitments ultimately is our goal to build greater trust. Trust is the magic glue which binds PPP schemes. Without it, they fray, and fall apart. Trust is clearly a two-way process and we’d be fools to think we can fix the PPP system on our own. What we can do, however, is work hard to ensure that we are championing transparency and trust, not just in our intentions but also in our actions.

We genuinely believe these commitments will help to deliver better Public Private Partnerships – creating more impact, more reward and better places. Not only will that help improve the perception of PPP, but it will ensure the model continues to evolve, to improve, and to change people’s lives for the better.

PPP: The reset (PDF) 7.6 MB

 

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