HISTORIC PRESS RELEASE : Andrew Smith sets out benefits of Public Private Partnerships – Treasury paper projects extra £20 billion investment in public services [March 2000]

The press release issued by HM Treasury on 15 March 2000.

A new Treasury paper published today by Chief Secretary Andrew Smith projects a £20 billion expansion of the Government’s Public Private Partnership (PPP) programme over the next three years.

Mr Smith was launching “Public Private Partnerships : The Government’s Approach” – the Government’s strategy to increase investment in the public sector to provide better services and better value for money – during a visit to Lewisham Docklands Light Railway station in South East London.

The paper sets out how the Government plans an expanded PPP programme which will add to the £12 billion deals already signed or re-structured deals by this Government, by securing:

£8 billion to modernise the tube;
an estimated £1 billion to modernise UK’s Air traffic control infrastructure;
more than 60 new education projects nationally;
25 new health projects nationally; and
12 other new transport projects nationally;

The document “Public Private Partnerships : The Government’s Approach” also sets out for the first time the Government’s objectives for PPPs and the underlying principles which are central to the way in which Government goes about developing new partnerships with the private sector.

It shows how the Government has modernised the PPP system by eliminating the obstacles it inherited to deliver an expanded programme, better value for money for the taxpayer and a better deal for staff in the public sector.

Mr Smith said that this capital investment would focus on the Government’s priority areas of health, education and transport and hailed it as a cornerstone of the Government’s modernisation programme.

He said:

“Public private partnerships are making a major contribution to the renewal and modernisation of Britain’s public services with better schools and hospitals, and huge investment in public transport.

“Between 1992 and 1997 no PFI hospital deals were signed. Yet in this Government’s first two years we have signed 35 major hospital projects and, including deals in the pipeline there are a total of 100 health projects in the programme. This represents the largest investment in new hospital facilities since the NHS was established.

“On average, privately financed projects are delivering savings of 17 per cent compared to public sector alternatives – this represents savings of £2 billion on a £12 billion programme.

“That is why we want to build on our achievements to date. Over the next three years we expect to sign contracts for projects with an estimated capital value of a further £20 billion. That will bring to £32 billion the level of capital investment this Government has earmarked for PPPs since May 1997.

“In launching this document today I am looking to the future and outlining a prospectus for partnerships. This will be seen as a blueprint to the opportunities and challenges associated with different types of partnership arrangements. Above all it demonstrates how PPPs will deliver real improvements to public services, for the benefit of customers, local communities and the country as a whole.”

Deputy Prime Minister John Prescott said :

“PPPs can harness the best of the private and the public sectors to modernise Britain – and ensure real improvements to our public services and infrastructure. This has been clear to me for many years.

“With PPPs, we can build new hospitals and new schools and improve our transport system, ensuring the private sector achieves best value for the taxpayer. At the same time, they can safeguard the public interest and protect staff – providing better quality services and giving modern Britain the infrastructure it needs.”

Public private partnerships help deliver the quality public services. By harnessing the disciplines, incentives, skills and expertise which private sector firms have developed in the course of their normal everyday business, they allow Government to deliver more services, to a higher standard, and more quickly than would be possible with the public sector alone.