PSP Partnerships are a hybrid public private partnerships based on building trust and confidence, with transparency in decision making. The partners share in the success of the partnership and have a shared incentive to work together to add revenue and capital value to property assets.
PSP Partnerships are, therefore, an additional tool available to councils and Combined Authorities to deliver devolution targets and the revenue savings and additional income that councils will need to fill the gaps in funding arising from the phasing out of Government grants. To support this role, PSP are working with CIPFA to develop a reporting system which:
PSP Partnerships do not involve the privatisation of services or the need to commit property up front before the partnership can be established. This would be the case with other public private partnership approaches such as Private Finance Initiative (PFI) and Local Asset Backed Vehicles (LABV). Instead, they are genuine collaborative partnerships between councils and PSP Facilitating, with an equal share in a Joint Venture Limited Liability Partnership (LLP). Decisions are made by consensus and projects only proceed if they are commercially viable and are better than the alternative approaches available to the council.
The up front project funding is provided by the private sector partner and there is no risk to tax payers money. Councils are guaranteed the current value of their asset and any uplift in value generated by the PSP Partnership is shared often substantially in favour of the council.These profits would otherwise all accrue to the developer if the assets were just sold on the open market. In addition, the council benefits from all savings and reduced revenue expenditure from any property rationalisation. The low risk, high benefit flexibility of PSP Partnerships make them the tool of choice for a growing number of councils.
Over 50 councils have expressed an interest in setting up their own PSP Partnerships and gaining access to the £500m Relational Partnering Fund which was launched in March 2015. The expression of interest process is still available to all councils and the wider public sector and will run through to the end of 2015.
To view the Fund Prospectus and submit an expression of interest, local authorities and other public sector bodies can go to publicsectorplc.com/eoi.
Council Consortium Group
For more information or to request a meeting go to publicsectorplc.com or contact Mark Hammersley, Corporate Director of Partnerships:
Telephone: 020 7871 1852
Mobile: 07771 820737