Minimising Risk: The Role of the Local Authority Risk Manager in PFTIPPP Contracts
| DOI | 10.1177/095207670301800205 |
| Author | John Hood |
| Date | 01 April 2003 |
| Published date | 01 April 2003 |
| Subject Matter | Articles |
Minimising
Risk:
The
Role
of
the
Local
Authority
Risk
Manager
in
PFTIPPP
Contracts
John
Hood
Glasgow
Caledonian
University
Abstract
Recent
pronouncements
by
senior
government
figures
would
suggest
that,
despite
much
opposition,
PFl/PPP
will
remain
the
favoured
route
for
the
procurement
of
large
public
sector
projects.
There
has
been
a
considerable
debate
surrounding
the
Value
for
Money
and
Public
Sector
Comparator
calculations
essential
to
gaining
approval
for
PFI/PPP,
much
of
which
has
focused
on
how
risks
are
allocated
between
the
parties
and
how
these
risks
are
valued.
This
article
considers
another
aspect
of
the
risk
element
of
PFI/PPP
projects,
specifically
the
role that
the
local
authority
risk
management
function
performs,
and
perhaps
should
perform,
in
the
process.
Based
on
three
local
authority
case
studies,
the
research
will
suggest
that
there
has
been
a
marginal
growth
in
the
involvement
of
internal
risk
management
experts
by
local
authorities.
Equally,
there
is
evidence
that
this
involvement
could
be
considerably
increased,
bringing
a
number
offinancial
and
operational
benefits
for
local
authorities.
Introduction
Despite
the
opposition
of
trade
unions
(Unison,
1997,
2001,
2002),
the
scepticism
of
many
academic
studies
(Gaffney
and
Pollock,
1997;
Coleshill
et
al.,
1998;
Broadbent
and
McLaughlin,
1999;
Ball
et
al.,
2000)
and
the
words
of
caution
expressed
by
the
Accounts
Commission
(2002),
there
seems
little
doubt
that
the
Blair
government
remains
firmly
committed
to
the
policy
of
the
Private
Finance
Initiative/Public
Private
Partnership
(PFI/PPP).
Whilst
there
may
be
modifications
to
some
strategic
and
operational
aspects,
most
notably
the
abolition
of
the
'two-tier
workforce',
the
message
from
the
2002
Labour
Conference
was
very
much
one
of
more,
and
not
less,
usage
of
PFI/PPP
schemes.
For
the
foreseeable
future,
therefore,
it
seems
likely
that
many
of
the
capital
projects
in
the
NHS
and
local
government
in
particular
will
be
funded
through
the
PFI/PPP
route.
Public
Policy
and
Administration
Volume
18
No.
2
Summer
2003
57
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