Introduction

Provision of public infrastructure has not escaped Labour's partnership philosophy. Although originally viewed as a mechanism for levering private finds into public sector development, the Private Finance Initiative (PFI) was reconceptualised as a form of public–private partnership in the earliest days of the Labour administration. By January 2001, three major hospital developments had been built and opened for business under PFI. A further 20 had reached financial close and work had begun on site.

This chapter explores the meaning and practice of partnership through an analysis of PFI and its troubled development in the NHS. Specifically, it focuses on the character and meaning of PFI partnerships for the NHS Trusts engaged in them. It begins with an examination of the initiative's early struggles and the determination with which Labour has sought to salvage it. The chapter considers the aims of the participating parties and the difficulties NHS Trusts encounter in achieving these aims. It concludes with an analysis of the nature of the evolving partnership. This endures well beyond contract signing and persists throughout the lifetime of the contract, typically 30 or more years. Thus, any conclusions here can only be preliminary and speculative, focusing on the setting-up stages.

The discussion is based on a broad range of documentary material: official guidance from the Department of Health and Treasury Taskforce; ‘oppositional’ material provided by organisations such as Unison; academic critiques, including those published by the Department of Public Policy at University College London; professional commentary and observation, such as that found in the British Medical Journal; and general and specialist press coverage. Additional observations are based on information obtained through interviews with 11 NHS Trust managers involved in various stages of eight first-wave PFI schemes. Although these accounts are not ‘balanced’ by the views of private sector partners, they nevertheless provide powerful insights into the problematic character of these deals as partnerships.

The development of PFI

The origins of PFI in healthcare lie in Conservative Chancellor Lamont's Autumn Statement of November 1992. This sought to attract private funding to resolve problems of under-investment in public infrastructure across a range of sectors, within a context of strict public expenditure controls. Public sector bodies seeking capital investment were encouraged to consider private finance possibilities. In 1994, this option became a requirement.