Open AccessThe Private Finance Initiative: An Innovative Procurement Tool for Today's Public Administrators
Author(s) -
Seth Gabriel,
J. W. Head
Publication year - 2006
Publication title -
policy perspectives
Language(s) - English
Resource type - Journals
eISSN - 2377-7753
pISSN - 1085-7087
DOI - 10.4079/pp.v13i1.4142
Subject(s) - procurement , private finance initiative , general partnership , finance , private sector , payment , business , public administration , public–private partnership , public finance , service (business) , public sector , quality (philosophy) , public relations , economics , economic growth , marketing , political science , philosophy , economy , epistemology , macroeconomics
The Private Finance Initiative is an innovative public-private partnership first pioneered in the United Kingdom. The initiative's goal is to obtain higher quality public services at a lower cost to the public by engaging the private sector. The program relies on private financing and expertise, output-based contract specifications, performance-based payment mechanisms, and negotiated risk transfers to achieve this goal. This article discusses the initiative's successes and failures using Her Majesty's Prison Service as a case study. The article finds that, while the program has limitations, the evidence of its successes suggests that American administrators should consider it as a procurement tool for public services in the United States.