Project management and the private finance initiative

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The research also found that people with PFI experience are in short supply, which has resulted in widespread headhunting in both sectors. The most successful projects are ones where the project manager understands the project and the type of project being undertaken. Additionally, a project manager who has been involved from the outset will understand the importance and the evolution of all the various different facets of the project. Less successful projects tend to be where non-specialists attempt to undertake unfamiliar tasks and come late into projects. Therefore, the more technically demanding the project, the more specialist the skills required, and success depends on matching the right projects with the right project managers. 5.6 The way forward The research has highlighted the importance of improving PFI project management and increasing the involvement of chartered surveyors. The research supports findings from other studies identified in the literature review (see NAO (2001) and other references in Section 2, for example) but also suggests that it is not just in the public sector that there are skills shortcomings in relation to project management within PFI. The private sector also lacks key skills as well as each sector having particular strengths. Moreover, further research is needed to pinpoint why private sector practices do not become involved in PFI: the current research focused on employees but it would also be valuable for further research to investigate why firms/practices resist PFI involvement/specialisation. Skills shortages in PFI must also be seen as part of the wider issue of skills shortages in the UK economy as a whole (see, for example, HM Treasury, 2002). A simple lack of information on training (Stevens, 1999) can cause organisations to provide less training than they require, and evidence has also shown that lower skilled individuals are less likely to demand training than higher skilled colleagues. The National Skills Task Force (2000) found, for example, that two main reasons why adults did not train in the UK were that they were not interested in learning, or did not need the skills for the job, both of which indicate that people may not be fully aware of the benefits of training. This supports the findings in the current study. 33 chapter five Conclusions and recommendations Project management and the private finance initiative Despite government initiatives to address skills deficiencies in PFI, problems clearly remain, and the RICS Project Management Faculty has a major role to play in encouraging its members to undertake training and education in skills which underpin project management work in PFI. This applies, however, to both the public and private sectors. The government’s Successful Delivery Skills Programme could serve as a useful matrix to help the Faculty promote skills uptake in key PFI areas. This could also be underpinned by improved PFI guidance for members and promotion of CPD, and future consideration given to making knowledge and understanding of PFI a ‘core’ competency in the Project Management APC. There also needs to be improved public sector understanding of project management roles and expertise available. Moreover, project management needs to be part of the early PFI process, both from the public sector and private sector points of view. This means that project managers need to develop targeted skills especially in PFI and negotiation (including people skills and communication skills), and there needs to be better skills transfer within the public sector, which can be founded on learning from experience. Finally, there needs to be greater standardisation in terms of streamlining processes and agreeing standard contract documents.
chapter six References Allen, G. (2001) The Private Finance Initiative (PFI), House of Commons Research Paper, 01/117, House of Commons Library. Arthur Andersen/Enterprise LSE (2000) Value for Money Drivers in the Private Finance Initiative. Audit Commission (2001) Building for the Future: the Management of Procurement Under the Private Finance Initiative, Management Paper, Audit Commission, London. Audit Commission (2003) PFI in schools: The Quality and cost buildings and services provided by early Private Finance Initiative schemes, Audit Commission London. Baird, G. (1996) Building Evaluation Techniques, McGraw-Hill. Ball, R., Heafey, M. and King, D. (2002) ‘The Private Finance Initiative and public sector finance’, Environment and Planning C: Government and Policy, vol. __, pp.57-74. Bates (1997) First Review of the Private Finance Initiative. Bates (1999) Second Review of the Private Finance Initiative (Available from: www.hm-treasury.gov.uk). CBI (1996) Private Skills in Public Service: Tuning the PFI, Confederation of British Industry, London. Denny, C. (2003) ‘Government abandons PFI for computer projects’, Guardian, July 16. Dixon, T., Jordan, A., Marston, A., Pottinger, G. and Pinder, J. (forthcoming) Lessons from UK PFI and Real Estate Partnerships, The Foundation for the Built Environment. Fox, J. and Tott, N. (1999) The PFI Handbook, Jordan Publishing Limited, Bristol. Graves, A. and Rowe, D. (1999) Benchmarking the government client – stage two study, Agile Construction Initiative, School of Management, University of Bath. Green, F. and James, D. (2003) ‘Assessing skills and autonomy: the job holder versus the line manager’, Human Resource Management Journal, Vol 13 No 1, 63-77. Greer, S. (2003) ‘Policy divergence: will it change something in Greenock?’ in Hazell, R. (ed.) The State of the Nations 2003: The Third Year of Devolution in the United Kingdom, Imprint Academic, London. HM Treasury (2002) Developing Workforce Skills: Piloting a New Approach, HM Treasury, London. HM Treasury (2003) PFI: Meeting the Investment Challenge, HM Treasury, London. Hobson, D. (1999) The National Wealth, HarperCollins, London. House of Commons Committee on Public Accounts (2002) Managing the relationship to secure a successful partnership in PFI projects: Forty-Second Report of Session, 2001-02. House of Commons Select Committee on Health (2002) The Role of the Private Sector in the NHS: First Report, Session 2001-2002. IPFA (2002) PFI and PPPs Press and Media Information (available at International Project Finance Association Website www.ipfa.org). IPPR (2002) Factsheet: The Private Finance Initiative, IPPR. Ive, G., Edkins, A. and Millan, G. (2000) The role of cost saving and innovation in PFI projects, Thomas Telford, London. Jones Lang LaSalle (1999) Achieving Corporate Agility Through Leasing Flexibility, Jones Lang LaSalle, London. Mott Macdonald (2002) Review of large public procurement in the UK, Mott Macdonald, Croydon. NAO (2001) Managing the Relationship to Secure a Successful Partnership in PFI Projects, National Audit Office (NAO) Report No HC 375, The Stationery Office, London. NAO (2003a) PFI: Construction Performance, Rep. No. HC 371, The Stationery Office, London. NAO (2003b) The Operational Performance of PFI prisons, Rep. No. HC 700, The Stationery Office, London. National Skills Task Force (2000) Third Report. Project management and the private finance initiative chapter six References 34
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