Project management and the private finance initiative

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Figure 1: Project management / PFI skills balance sheet Weaknesses Strong Skills Weak The future Public sector • Client understanding • Process understanding • Political skills • Specialist sector knowledge (ie healthcare) • Negotiating skills • Management skills • Whole life costing • Construction skills • Financial modelling • Stakeholder management • People skills The research supports findings from other studies but also suggests that it is not just in the public sector that there are skills shortcomings in relation to project management within PFI. To some extent complementing skills rather than duplicating skills is desirable between the public and private sectors, but nonetheless skills weaknesses are an important barrier to successful PFI. Skills shortages in PFI must also be seen as part of the wider issue of skills shortages in the UK economy as a whole. A simple lack of information on training can cause organisations to provide less training than they require, and evidence from other research has also shown that lower-skilled individuals are less likely to demand training than higher-skilled colleagues. Despite government initiatives to address skills deficiencies, problems clearly remain in PFI, and the RICS Project Management Faculty has a major role to play in encouraging its members to undertake training and education in the skills which underpin Private sector • PFI experience • Construction experience • Financial modelling • Technical advice • Legal advice • Risk appreciation • Specialist sector knowledge (ie healthcare) • Whole life costing • Client understanding • People skills +ve -ve 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; promotion of CPD and future consideration given to making knowledge and understanding of PFI a ‘core’ competency in the Project Management APC. But there is also an onus on the private and public sectors to support training and education in key areas. In the public sector, retaining the knowledge base and expertise in PFI is difficult, particularly where transfer of staff between sectors is common. The public sector often tends to try to identify one person to cover every aspect of project management, whereas the private sector draws on a pool of expertise. There also needs to be improved public sector understanding of project management roles and the expertise available. Moreover, project management needs to be involved early in the PFI process, both from the public sector and private sector’s points of
view. This means that project managers need to develop targeted skills especially in PFI and negotiation, 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 to make the PFI process more efficient and effective. About the Research This research was carried out between April 2003 and August 2003. The study is based on a literature review; an online survey of all RICS Project Management Faculty members (701 responses received); and 18 telephone interviews (which incorporated six case studies) with clients, SPVs and consultants based around PFI projects in central and local government and the NHS. This is the first detailed analysis of PFI carried out within the Faculty. Further information The full report is available from the RICS Project Management Faculty at www.rics.org/projectmanagement or email pm.faculty@rics.org
Page 1 and 2: Project management and the private
Page 3 and 4: The Private Finance Initiative (PFI
Page 5: The project manager’s role also v
Page 9 and 10: 5 Conclusions and Recommendations 5
Page 11 and 12: 1.4 Report structure This report co
Page 13 and 14: The SPV is a limited company that i
Page 15 and 16: guidance on risk management. By imp
Page 17 and 18: can be shared and disseminated acro
Page 19 and 20: Table 3.1: Matrix of interviewees C
Page 21 and 22: Other key aspects identified as par
Page 23 and 24: External project managers tend to b
Page 25 and 26: espondent on the SPV side, they ten
Page 27 and 28: • All the organisations had a pro
Page 29 and 30: Figure 4.1: Type of organisation Mu
Page 31 and 32: Table 4.1: Involvement in PFI Organ
Page 33 and 34: Figure 4.10: Approximate value of P
Page 35 and 36: Figure 4.15: Most important PFI ski
Page 37 and 38: 4.6 Continuous professional develop
Page 39 and 40: management roles existed and were p
Page 41 and 42: 5.5 Project management knowledge an
Page 43 and 44: chapter six References Allen, G. (2
Page 45 and 46: chapter seven Appendices Appendix A
Page 47 and 48: Appendix B: Useful websites • 4Ps
Page 49 and 50: Appendix D: Successful Delivery Ski
Page 51 and 52: The project manager role and PFI 5.
Page 53 and 54: Appendix F: Questionnaire Project M
Page 55 and 56: Section B1: Your experience of the
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11. Which type of skill do you cons
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www.rics.org RICS is one of the lea
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