Public private partnership financiers' perceptions of risks

Public private partnerships (PPP) are used extensively in the provision of public services. Who actually bears the risk in such schemes? This new research report looks at PPP schemes from a new and different viewpoint by examining financiers’ perceptions of risks and then comparing them to the perceptions of their public sector partners. The report explains the complex network used in PPP schemes and investigates how financiers perceive the risks associated with PPP; how financiers manage these risks; how changes in the PPP industry, including the impact of the credit crunch, have affected financiers’ perceptions of risks; and how financiers’ perceptions of risks differ from those of their public sector partners. A clear understanding of how risks are dispersed and managed is essential to inform future policy development, especially at a time when the intention of the new government and the impact of public spending cuts on PPP is uncertain. The intention with PPP is that risks should be held by the party best able to manage them, and that the transfer of risk is priced into any PPP contract, yet one of the key findings of this research is that it is possible to transfer risk back to the public sector after contracts have been settled. The impact of this on value for money to the public sector and ultimately taxpayers needs to be assessed.