Paul Deverill, our Head of PFI and PPP Strategic Advice, joins industry leaders to explore innovative funding models for vital infrastructure projects.

With public finances under increasing strain and decades of underinvestment taking their toll, the construction sector is looking to reimagine how Britain funds its essential infrastructure. From crumbling schools and hospitals to urgent power and water shortages, the scale of the challenge demands fresh thinking about how we finance the assets our communities desperately need.

Paul Deverill, Ridge’s Head of PFI and PPP Strategic Advice, recently joined a high-profile panel discussion as part of Building magazine’s Building the Future Conference. Alongside Steve Beechey from Wates Group and Beth West, founder of Navigate Advisory and former CEO of East West Rail, Paul explored how public-private partnerships could be reimagined for today’s economic and political climate.

The scale of the challenge

The statistics paint a stark picture. Paul highlighted that in healthcare alone, only two years in the past 50 have seen capital investment above the OECD average levels. Similar patterns exist across education,  and other critical sectors. “We’ve become addicted to not investing in infrastructure,” Paul noted, comparing Britain’s record unfavourably to other nations.

The government’s 10-year infrastructure strategy, published in July, acknowledged this gap and tentatively reopened the door to private finance—the first positive reference to PPP since the moratorium on PFI in 2018. However, the strategy remains light on detail, with just a page and a half devoted to PPP.

Learning from the past

Paul was careful to acknowledge both the successes and failures of PFI. While media coverage has focused on horror stories, he pointed to numerous examples of well-functioning projects. “There are a lot of schemes out there that have actually delivered and Authorities are happy with the performance of their schemes. PFI delivered lots of schemes very quickly and in the majority of cases on time,” he explained.

However, he was equally clear about what went wrong: “Was it perfect? Absolutely not. Are there things that can be improved? Yes.”

The key lessons include:

• Transparency: Better communication between public authorities and stakeholders about what’s happening during operations
• Risk allocation: Having honest conversations about who is best placed to manage specific risks, rather than simply maximizing risk transfer
• Value for money: Being able to demonstrate clear benefits beyond just off-balance-sheet treatment
• Flexibility: Building in mechanisms to adapt to the inevitable changing needs over long-term contracts

A modern model for PPP

Drawing on recent developments, particularly the Mutual Investment Model (MIM) in Wales, Paul outlined how a reimagined PPP could work more effectively:

• Standardisation: Bespoke design for every project increases time and costs. Standardized designs, particularly for facilities like neighbourhood health centres or schools, could dramatically improve efficiency.
• Simplified contracts: “The amount of money wasted on advisors reinventing the wheel on contracts has to stop,” Paul emphasized. The contracts don’t need to be as complicated as they’ve been, particularly for standardized assets. The industry has the blueprint for closing contracts efficiently with minimal costs.
• Public sector equity stakes: Unlike historical PFI where special purpose vehicles were 100% privately owned, modern models should include public sector equity participation. This ensures the public sector has a seat at the table in key decisions, improves transparency and fosters greater partnership working.
• Focused scope: Learning from past mistakes, maintenance contracts should be limited to hard facilities management—ensuring assets are properly maintained throughout their life—rather than complex soft FM arrangements that often led to disputes and poor value.

The market reality

One of Paul’s most important points was about market capacity. “There isn’t a market there now,” he stated bluntly. “The industry is not set up to address a big PPP market at the moment. The resources are just not there.”

After years of moratorium prohibiting PFIs, the expertise has dispersed, and teams have been dismantled. Building back this capability requires clear political commitment and a substantial pipeline of projects. “There needs to be political enthusiasm and a lot of work developing the market before this can be successful,” Paul warned.

Where to start

The panel agreed that a cautious, staged approach makes sense. Neighbourhood health centres offer an ideal starting point—relatively straightforward assets where standardisation can work effectively. This would allow the model to be tested and refined before tackling more complex healthcare facilities like major hospitals.

Paul also highlighted that a new model could be used to deliver much needed investment in other sectors such as schools and prisons where standardised designs could lend themselves to efficient PPP delivery, though he was careful to note this shouldn’t be seen as comparing these had a very different level of complexity and risk when compared to hospitals.

The critical timeline

The government set out limited detail on the new PPP model in the November budget, other than indicating that a new PPP approach for neighbourhood health centres and potentially for decarbonising the public sector estate. It is clear that the new model will take time to be developed and for engagement to take place with the market. However the key will be to quickly land on a framework that stakeholders are comfortable with, that addresses the lessons learned from PFI, then allow it to evolve based on real-world experience of delivering the projects.

The path forward

For PPP to succeed in 2026 and beyond, several elements need to align:

1. Clear government commitment – with a substantial project pipeline that is acted upon
2. Quick decisions – on the model and procurement framework to enable market preparation
3. Adequate public sector capacity – to develop business cases and manage the procurement, development and operational contracts
4. Streamlined approval processes – clarity over the time taken at each stage and the requirements for approval and demonstration of value for money
5. Money flowing – delivering on the pipeline to allow companies to make investment decisions to support project delivery

As Paul concluded:

Projects need to come forward to allow the money to start flowing so that companies can make sensible business decisions about investing in their teams and building up capacity. Until that happens, it’s just talk.

 

For more information about Ridge’s PFI and PPP strategic advice services, or to discuss how we can support your infrastructure strategy, please contact Paul Deverill