A comparative analysis and evaluation of specialist PPP units' methodologies for conducting value for money appraisals

Anthony Boardman, Mark Hellowell

Research output: Contribution to journalArticlepeer-review

Abstract

Governments throughout the world are turning to public‒private partnerships (PPPs) as a means of providing new infrastructure. The decision to adopt a PPP over conventional government procurement is usually based on a value for money (VfM) appraisal, but this analysis is conducted differently in different countries. This article describes the correct way to conduct VfM analysis if the goal is to minimize the present value of the costs to the Treasury and if the goal is to maximize social welfare. It then compares the documented methodologies of nine specialist PPP units. It identifies four ways in which these methodologies depart from either of the correct approaches, and shows how each departure favors the PPP option. Finally, it shows how the UK approach might be augmented to determine the best value to society.
Original languageEnglish
Pages (from-to)191-206
Number of pages16
JournalJournal of Comparative Policy Analysis
Volume19
Issue number3
Early online date16 Jun 2016
DOIs
Publication statusPublished - 2017

Keywords

  • public-private partnership
  • value for money
  • comparative evaluation
  • discount rate
  • risk
  • social welfare
  • optimism bias

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