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Source: Public Sector Executive Jan/Feb 2013

David Pokora, chief executive of the LIFT Council, gives his verdict on the outcome of the PFI review in the Autumn Statement on December 5.

Public sector property expert David Pokora, who spent 26 years in the NHS, including 11 as chief executive of an acute trust, is executive director of the LIFT Council, which represents 95% of the private sector companies involved in LIFT [local improvement fi nance trust] around the country.

He spoke to PSE about the future of joint public-private property ventures, following the December 5 Autumn Statement, which included a long-trailed shift in PFI policy announced by chancellor George Osborne following the PFI Review.

‘PF2’ is described by the Government as “a new, faster and more transparent approach to securing investment in public infrastructure. The Government will become a shareholder in future projects, to ensure a more collaborative approach to improving project performance and managing risk, and will share in the fi nancial rewards alongside private sector shareholders.”

A greater public sector involvement in private financing is at the heart of the LIFT model itself. Pokora said: “LIFT is very much a joint venture partnership, so having had the experience now for coming up to 7-8 years of working in a JV effectively with private and public sectors as equal partners in a company, we strongly feel this is the way to go.”

He said the 100% privately-owned arrangements caused some of the problems in the past due to a lack of trust and partnership in some cases.

“The fact that [the Treasury has] come forward with a JV structure is exactly what we articulated as being a wise move and a good way forward for both the private sector and public sector.”

Pokora has had experience of PFI health schemes from within the NHS, from within the private sector, and with joint venture LIFT companies. He said: “I’ve seen all three aspects of these arrangements from a personal perspective: I know I am just one voice, but my experience is that the JV model works substantially better than any of the other arrangements.”

Clearly the emphasis in terms of NHS and public sector property has shifted since the LIFT model originated, with the fi nancial context now meaning that it is rationalisation and disposal of buildings that tends to take priority over investment in new ones.

Pokora said: “We’re not seeing as many newbuilds, and that’s a function of a number of factors.

“The financial constraint upon the whole of the public sector, we all know about, and it would be staggering if it didn’t have an impact on new developments – it has.”

He said the specific changes to the NHS were also having an impact, following the transition to a new structure under the Health & Social Care Act.

“You can’t undertake such a major change in the organisational structure of the NHS and not have people focus on the more pressing requirements, i.e. ‘who’s going to do this job after April 1 and how does it get transferred to them’.

“Longer-term thinking frankly goes out the window, as the urgent crowds out the important. Today’s pressing requirements will always come first and making these changes in the health service is that pressing requirement. “Longer-term thinking about the shape of the NHS estate, and the way it can actually facilitate changes in clinical care, will come back in when clinical commissioning groups and others have all the responsibility. By then, everything will be ‘real’ and they’ll start to think about what to do with these powers they now have, how they effect change and the impact upon the estate. We’ll start to see more of a focus on changing the estate to facilitate new models of care.

“It’s frustrating to have a hiatus while the NHS goes through this upheaval but that’s life and there’s no point moaning about it. The reality is that we’ve got the NHS going through such change and it will come out the other side and business will resume.”

Although LIFT is associated most closely with the NHS, its scope is wider, as Pokora explained to us in an earlier interview: “They’ve already demonstrated that they aren’t just healthcare bodies. The fact that LIFT was set up by the Department of Health does mean some people think they’re just health structures, but in reality the original OJEU advertisements that appeared were very broadly drafted to cover health, local authority services, education, and so on.

“There are examples, many up and down the country, where local authorities have used the LIFTco to deliver services, be it leisure, education, libraries; I think even more use of that will be made in the future.”

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