The Benefits of PPP Software to Manage PFI’s

The news is bleak when you read about PFI contracts in the UK press currently, particularly when you hear how they are said to be putting many NHS trusts at financial and clinical risk. This situation is accelerated of course by higher borrowing costs resulting from the global credit crisis.

There are however a number of PFI contracts where this is not the case and we fail to celebrate the success of these. The government doesn’t have a good track record in building public buildings and PFIs deliver infrastructure on time and in budget, often using genuine innovation, that otherwise would not have been delivered had it been left to public funding. Hospitals are a good example of this. Until the invention of PFIs, no new hospitals had been built in the UK for 30 years.

Each PFI contract includes the repayment of capital, interest on the loan and ongoing services for the term of the contract such as maintenance and upgrading equipment, so that the building is returned to the public as new at the end of the contract. Not forgetting of course, the benefit that we, the public is receiving from the new infrastructure and services; in addition to the numerous jobs which building the infrastructure itself has created.

When you look overseas, many of the world’s major economises have adopted the PPP (public-private partnership) model, which is similar to the UK PFI model in that it brings together private sector expertise and financial initiatives in order to provide timely delivery of public sector infrastructure and services. In an increasing difficult global economy, the PFI and PPP models provide a welcome investment to continue building new infrastructure and manage existing aging and often deteriorating infrastructure in order to boost social programmes and economic competitiveness.

A strong PFI / PPP partnership is built around good information and this is where Information Technology and software applications are paramount. Because of the scope of services involved in PFI and PPP contracts and the extent of risk transfer to the private sector, contracting through this method is an inherently complex process. Consequently the quality of information shared among the stakeholders is of fundamental importance for the success of the partnership. A comprehensive software solution with an integrated payment mechanism can mean the difference between success and failure. Comprehensive P3 software, PFI software and PPP software solutions with an integrated payment mechanism system provide:

• Auditability and compliance – so that relevant data is recorded to enable systematic review and evaluation to determine the quality of the services provided, thereby strengthening the client-service provider relationship and ensuring value for money over the life of the contract
• Transparency – so that relevant information about the nature and quality of service provided under the contract is fully available and accessible
• Increased efficiency and improved service delivery through the use of an in-built alarm function into the software forewarning of potential service failures before they approach their deadline

A payment mechanism application integrated into an IWMS (Integrated Workplace Management System), CAFM (Computer Aided Facilities Management) or service delivery software application secures value for money across the contract for the client and provides a month by month audit tool (with complete data integrity) of the service that has been delivered. The payment mechanism application will include painshare / gainshare payment rebate functionality, so that there is financial compensation for failure to deliver services. A comprehensive integrated payment mechanism system within a PPP contract secures good levels of service for the stakeholder and demonstrates value for money to the general public. Likewise, for the service provider a PPP software solution helps to manage their operational risk, because they can be confident about managing the performance and contract service delivery to the specified quality and within budget. PPP software streamlines best practice and helps to deliver a quality service and encourages efficiency and a value added environment.

Simply put, PFIs and PPPs are finite contracts which many countries have adopted the concept of and have demonstrated that it delivers innovation, value for money, high quality services and where transparency is incorporated into the contract and backed by a properly integrated payment mechanism system to secure performance, the model can really work. In essence, call it PFI or PPP; we need long-term private sector involvement in the delivery of public services.

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