200 PFI projects are set to expire in the next 10 years, presenting not just challenges and opportunities as we've previously discussed, but also a mammoth task for those involved in handback. A smooth handover process is in the interest of parties on both sides. So how is it achieved?
We've already looked at expectation management, and collaboration; let's look at the third key theme - resourcing.
It is clear that in order to achieve successful expectation management and collaboration all parties will need to deploy the right resources. Both the public and private sectors have already advanced along that learning curve, with specific teams created to focus efforts and to prepare.
One of the issues flagged in the Treasury's report is the need for contracting authorities to be able field resource with the appropriate skill set. The IPA will provide strategic advice and expert practical support to government bodies and contracting authorities by collaborating with Local Partnerships and central commercial functions. The detail of how that might be managed is yet to crystalise, for example via a central unit at the IPA, with local resource or with consultant led teams being pulled together on a project-by-project basis.
Funding for the necessary resources remains unclear. In addition to a multidisciplinary team from within the contracting authority, and depending on project complexity, the SFT recommends that external advisory support made up of financial, technical and legal consultants may be required. Consultant teams such as this come at a cost and we have already seen some examples of contracting authorities seeking to put teams in place for specific projects.
Deploying the experience 'on the ground' is a challenge for contracting authorities but there are clear advantages in finding teams that can apply a consistent set of principles, albeit with different tactics depending on the provisions of the underlying agreements.
Structuring the response to the challenge, either by grouping contracts or grouping some form of centrally managed resource (geographically or on a sector basis) will be fundamental in the process and will require detailed strategic thinking, planning and execution on the part of UK Government, devolved parliaments and other bodies such as the IPA and the SFT.
What's next?
Bringing the three components together; (1) expectation management; (2) collaboration; and (3) resourcing, will be vital in delivering effective handback and its success could have a profound impact on the infrastructure sector going forward. It is clear that action is needed in advance of expiry to allow contracting authorities to take stock and consider in detail the nature of services to be delivered in the future, the assets from which the services will be delivered, what has worked and what needs to be done better.
Handback is therefore an opportunity for contracting authorities to adjust where necessary and to ensure that they continue to deliver services in the most effective way possible when seen through the prisms of net zero carbon and the digital era. These two issues will be big challenges for the public sector and it is these challenges which create opportunity for the FM sector in furthering their trusted relationship with contracting authorities through continuity of service and innovation in service delivery to help shape the infrastructure of the future.
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