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An Examination of the UK Treasury's Evidence Base for Cost and Time Overrun Data in UK Value-for-Money Policy and Appraisal

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  • Allyson M. Pollock
  • David Price
  • Stewart Player

Abstract

UK government procurement policy rests on Treasury claims that the private finance initiative (PFI) has reduced cost and time overruns. We review the five studies cited by the Treasury in support of this claim and find that only one purports to compare PFI with traditional procurement. The results of this single study are uninterpretable because of selection bias, small sample size (only 11 out of 451 PFI projects are included) and fundamental flaws in the analysis. There is thus no evidence to support the Treasury cost and time overrun claims of improved efficiency in PFI. We conclude that Treasury appraisal guidance, the ‘Green Book’ which compares PFI with other methods of procurement, is not evidence based but biased to favour PFI.

Suggested Citation

  • Allyson M. Pollock & David Price & Stewart Player, 2007. "An Examination of the UK Treasury's Evidence Base for Cost and Time Overrun Data in UK Value-for-Money Policy and Appraisal," Public Money & Management, Taylor & Francis Journals, vol. 27(2), pages 127-134, April.
  • Handle: RePEc:taf:pubmmg:v:27:y:2007:i:2:p:127-134
    DOI: 10.1111/j.1467-9302.2007.00568.x
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    Citations

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    Cited by:

    1. Graeme A. Hodge, 2010. "Reviewing Public–Private Partnerships: Some Thoughts on Evaluation," Chapters, in: Graeme A. Hodge & Carsten Greve & Anthony E. Boardman (ed.), International Handbook on Public–Private Partnerships, chapter 5, Edward Elgar Publishing.
    2. Miranda Sarmento, J. & Renneboog, L.D.R., 2014. "Public-Private Partnerships : Risk Allocation and Value for Money," Other publications TiSEM b9218010-a357-4c0a-805a-7, Tilburg University, School of Economics and Management.
    3. Samuel Carpintero & Ole Helby Petersen, 2014. "PPP projects in transport: evidence from light rail projects in Spain," Public Money & Management, Taylor & Francis Journals, vol. 34(1), pages 43-50, January.
    4. McQuaid, Ronald W. & Scherrer, Walter, 2009. "Changing reasons for public private partnerships," Working Papers in Economics 2009-2, University of Salzburg.
    5. Manisha Verma, 2016. "Role of the State in Partnerships with the Private Sector," Journal of Development Policy and Practice, , vol. 1(1), pages 53-70, January.
    6. Thuso Donald Mosabala, 2020. "Towards Explaining the Cause of PPP as a Dangerous Diversion of Meager Resources in Lesotho," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(6), pages 606-611, June.
    7. Moore, Mark A. & Boardman, Anthony E. & Vining, Aidan R., 2017. "Analyzing risk in PPP provision of utility services: A social welfare perspective," Utilities Policy, Elsevier, vol. 48(C), pages 210-218.
    8. Zhao, Jianfeng & Greenwood, David & Thurairajah, Niraj & Liu, Henry J. & Haigh, Richard, 2022. "Value for money in transport infrastructure investment: An enhanced model for better procurement decisions," Transport Policy, Elsevier, vol. 118(C), pages 68-78.
    9. Martijn van den Hurk & Marlies Hueskes, 2017. "Beyond the financial logic: Realizing valuable outcomes in public–private partnerships in Flanders and Ontario," Environment and Planning C, , vol. 35(5), pages 784-808, August.
    10. Chung, Demi & Hensher, David A. & Rose, John M., 2010. "Toward the betterment of risk allocation: Investigating risk perceptions of Australian stakeholder groups to public-private-partnership tollroad projects," Research in Transportation Economics, Elsevier, vol. 30(1), pages 43-58.
    11. Robert Bain, 2010. "Public sector comparators for UK PFI roads: inside the black box," Transportation, Springer, vol. 37(3), pages 447-471, May.
    12. Ole Helby Petersen, 2010. "Regulation of public--private partnerships: the Danish case," Public Money & Management, Taylor & Francis Journals, vol. 30(3), pages 175-182, May.

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