Public-Private Partnership Health Check: Managing partnerships during their lifetime

The document argues that the long-term nature of PPPs often makes it difficult for governments to adapt contracts to evolving sustainability priorities. It proposes a 'health check' framework based on a triple bottom line—economic, environmental, and social sustainability—to guide the review and renegotiation of existing agreements. Using the UK's transition from PFI to PF2 as a context, it suggests mechanisms like 'invest to save' and gain-share provisions to enhance value-for-money and environmental performance. It also highlights the importance of life-cycle assessments (LCA) and ethical labor standards in ensuring the long-term viability and social acceptance of infrastructure projects.

• The United Kingdom's transition from the Private Finance Initiative (PFI) to Private Finance 2 (PF2) introduced several reforms to address criticisms of the old model, including the government taking a minority equity stake in projects, limiting procurement time to 18 months, and removing 'soft' facilities management services (such as cleaning and catering) to be tendered separately.
• Economic sustainability in PPPs requires a comprehensive Value-for-Money (VfM) analysis that extends beyond direct costs to include committed public funds, end-user charges, and the cost of risk transfer. The document suggests 'invest to save' strategies—trading capital expenditure for lower operational costs through energy efficiency—and 'gain share' provisions to incentivize both partners to invest in sustainable technology.
• Environmental sustainability should be measured using Life-cycle assessment (LCA), which is described as the 'gold standard' because it considers impacts from raw material extraction through to end-of-life processes, providing a more sophisticated measure than a simple carbon footprint.
• There is significant potential for PPPs to facilitate climate change adaptation and mitigation through the refurbishment of inefficient infrastructure and the use of green revenue sources, such as carbon funds or specialized loans from entities like the UK's Green Investment Bank or the European Investment Bank.
• Social sustainability in PPPs involves ensuring ethical working conditions, paying living wages, and maximizing social returns. In the UK, the Public Services (Social Value) Act 2012 mandates that public authorities consider economic, social, and environmental well-being in public services contracts.
• Modifying existing PPP contracts is legally complex; in the European Union, modifications may require new competition if they fundamentally alter the arrangement. However, the document suggests that windfall gains from refinancing can be designated for environmental or social enhancements, such as energy-saving retrofits or enhancing workers' pension funds.

APA

Semple, A., & Turley, L. (2013). Public-Private Partnership Health Check: Managing partnerships during their lifetime. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/ppp_health_check.pdf

Chicago

Semple, Abby, and Laura Turley. Public-Private Partnership Health Check: Managing partnerships during their lifetime. International Institute for Sustainable Development, 2013. https://www.iisd.org/system/files/publications/ppp_health_check.pdf.

Wikipedia

{{cite report |last1=Semple |first1=Abby |last2=Turley |first2=Laura |title=Public-Private Partnership Health Check: Managing partnerships during their lifetime |publisher=International Institute for Sustainable Development |date=February 2013 |url=https://www.iisd.org/system/files/publications/ppp_health_check.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{semple2013publicprivate, author = {Semple, Abby and Turley, Laura}, title = {{Public-Private Partnership Health Check: Managing partnerships during their lifetime}}, institution = {International Institute for Sustainable Development}, year = {2013}, month = feb, url = {https://www.iisd.org/system/files/publications/ppp_health_check.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }