{"id":519065,"date":"2025-04-25T11:39:01","date_gmt":"2025-04-25T10:39:01","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=519065"},"modified":"2025-04-25T11:44:59","modified_gmt":"2025-04-25T10:44:59","slug":"the-power-of-perception-in-private-finance-decision","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/sections\/long-reads\/opinion\/the-power-of-perception-in-private-finance-decision-25-04-2025\/","title":{"rendered":"The power of perception in private finance decision"},"content":{"rendered":"

Writing in Construction News<\/em>, Paul Morrell, the government\u2019s former construction adviser<\/a>, offers a blunt assessment: \u201cPolicy and government communications are profoundly influenced by how they will play in the press and on the street.\u201d<\/p>\n

His critique of the government\u2019s response to the Grenfell Tower Inquiry and the Construction Products Reform Green Paper makes essential reading.<\/p>\n

Nowhere, perhaps, is Morrell\u2019s point about perception shaping policy more relevant than in the debate over how to attract private finance to fund public infrastructure delivery. We recently learned that ministers will, next month, unveil their approach to this crucial area in the long-awaited 10-year infrastructure strategy<\/a>.<\/p>\n

The last major attempt, the private finance initiative (PFI) remains politically toxic.<\/p>\n

Rolled out with gusto by New Labour in the 1990s, it quickly gained a reputation for enriching private consortia at the taxpayers\u2019 expense.<\/p>\n

Official audits showed that early PFI schools were inferior to those built via traditional procurement, but many in the construction industry argue that PFI steadily improved as public authorities became savvier in shaping the contracts.<\/p>\n

Within two decades, the model progressed from cheap, cookie-cutter designs to delivering the Stirling Prize-winning Burntwood School in 2015.<\/p>\n

Critics also often cited higher overall costs under PFI than traditional procurement routes but, in 2018, the National Audit Office concluded that there was insufficient data to prove or disprove that.<\/p>\n

till, as Morrell highlights, such nuance is not the overriding factor influencing policymaking. PFI is politically unpalatable. However, its core mechanics are likely to return under a different name.<\/p>\n

If the government wants to keep infrastructure spending off the books, any new public-private partnership model will need to replicate PFI\u2019s transfer of ownership and maintenance risk to the private sector.<\/p>\n

One obvious candidate is already in play: the Mutual Investment Model (MIM), developed by ministers\u2019 Labour Party comrades in the Welsh Government. Conveniently, the civil servant who oversaw its rollout in Welsh schools, Sara Humber, now holds a senior post in the fledgling National Infrastructure and Service Transformation Authority.<\/p>\n

MIM gives the government a minority equity stake in projects, providing a seat on a project vehicle\u2019s board and a share of the profits, without ceding the level of control that put it on the Treasury\u2019s books.<\/p>\n

Whether such tweaks to the PFI model succeed in blunting inevitable political criticism of any new model unveiled for English infrastructure will be key in shaping the construction industry\u2019s fortunes in the years ahead.<\/p>\n","protected":false},"excerpt":{"rendered":"

Writing in Construction News, Paul Morrell, the government\u2019s former construction adviser, offers a blunt assessment: \u201cPolicy and government communications are profoundly influenced by how they will play in the press and on the street.\u201d His critique of the government\u2019s response to the Grenfell Tower Inquiry and the Construction Products Reform Green Paper makes essential reading. …<\/p>\n","protected":false},"author":1,"featured_media":502309,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[559,567],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n