PPP, PFI and MIM
Public Private Partnerships, Private Finance Initiative, Mutual Investment Model
We review and support the renegotiation of public sector contracts to make savings, including reducing the cost of complex PFI contracts.
We have helped 57 public sector organisations to identify over £1.2 billion in savings. We can help achieve efficiencies across a range of areas from contract management strategy, refinancing and savings reviews to benchmarking, market-testing and establishing regional contract management hubs. Our PPP and PFI specialist team helps increase the commercial skillset and contractual knowledge of public sector stakeholders.
We support the Welsh Government by providing the expertise to fulfil the £500 million of PPP projects included in the 21st Century Schools Programme, conduct stakeholder engagement programmes and support councils to deliver operational PFI savings.
Support for public sector contracts: COVID-19
At Local Partnerships, we are doing everything we can to provide support to hard-working colleagues in the public sector. We have received a number of enquiries in relation to the complex contracting landscape that has been affected by the COVID-19 outbreak. We are already providing advice and support to councils, especially where public service provision is outsourced. We are also supporting a significant number of infrastructure-related projects that are delivered through the Private Finance Initiative (PFI).
The continued provision of core services is vital at a time when resourcing will be significantly impacted.
The flexibility and adaptability of contractors and contracts is essential. All sectors must work together to resolve issues to achieve a mutually beneficial outcome. Any solution must ensure that elements are only changed for an appropriate length of time.
We can help ease the pressure on contracting authorities to vary all forms of contracts quickly, whilst ensuring this is managed carefully and appropriately documented.
Dependent on the nature of the contract, there may be the opportunity to use commercial provisions to optimise service delivery (for example, rescheduling lifecycle maintenance where a facility is closed).
We are a wholly-owned public sector organisation and work exclusively for public sector.
We are a joint venture between the Local Government Association, HM Treasury and the Welsh Government.
We have in-depth experience dealing with the issues you or your contractor may be facing. Areas of support we offer are:
- reviewing the form of commercial arrangements in place and prioritising the interventions
- assessing whether COVID-19 would be treated as a Force Majeure event or not. This issue is treated differently in different contractual forms
- assessing the robustness of the contracting party due to issues such as the availability of facilities management resources and the financial resilience of the supply chain
- considering whether it is appropriate to alter a service specification in the short term (for example, increasing the frequency of cleaning rotas)
- interpreting the Procurement Policy Advice being issued by Cabinet Office. This new guidance is being issued to deal with pressing issues, including the need to procure other services quickly
Please contact Michael Berrington:
07717 700 111 | 020 7664 3266
In 2018 – 19 we helped our clients achieve:
Public Private Partnerships (PPP)
We were an integral part of the project team leading research into alternative forms of financing public sector infrastructure, specifically investment- based crowdfunding for the Financing for Society project and the development of a Community Municipal Bond.
Private Finance Initiative (PFI)
We supported central and local government by resolving contractual and operational issues, ensuring effective challenge to special purpose vehicles (SPVs), settling disputes, identifying, negotiating and implementing savings. We developed the commercial knowledge and skill set of the public sector advising on key contractual processes such as refinancing, benchmarking, market testing, contractual variations and termination saving the public sector over £13m through refinancing and negotiation of insurance disputes.
The collapse of Carillion in January 2018 impacted a significant number of our PFI clients. Support continued in the 2018-19 financial year, ensuring continuity of service, replacement of shareholders and service providers as required. We worked with councils to ensure their SPVs are monitoring risks associated with their sub-contractor failure and have appropriate risk mitigation plans.
Mutual Investment Model (MIM)
We worked across the three projects that form the Welsh Government’s MIM programme, leading the 21st Century Schools programme and providing commercial support to the A465 and Velindre Cancer Centre projects. In July 2018, the A465 was the first MIM project to enter procurement. The 21st Century Schools project will enter procurement in 2019-20.
For more information about what we have helped our clients achieve, see our 2018-19 impact report.
Local Partnerships’ expert advice has helped us resolve a range of PFI contract issues. They identified savings within our projects and have supported us in their implementation. Their commercial expertise is helping us get the most from refinancing our BSF projects and is delivering significant savings. These are valuable resources in the current financial climate that the Council is able to reinvest into its front line council services.
Ian Rooth, Head of Finance, Barnsley Metropolitan Borough Council
Local Partnerships’ insight and knowledge on the PFI market has directly influenced how we’ve progressed with our PFI savings negotiations – in particular their understanding of the funding market has helped us minimise the risk of incurring potential costs by pursuing proposals that were likely to be considered unacceptable.
Andrew Gate, Commercial Services Team, North Tyneside Council
The Local Partnerships team has exceeded the original brief in providing very professional and effective support and advice in the review of two individual PFI contract provisions. The review team provided a comprehensive assessment that has the potential to offer further budgetary savings opportunities.
Jonathan Henry, Norfolk Constabluary
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Programme Director – PPP & PFI
Programme Director – 21st Century Schools MIM