Making sense of the private finance initiative

Developing public-private partnerships By Courtney A Smith Radcliffe Medical Press 211 pages£27.50 Readers attracted by the rich scope for irony in the title may be disappointed. It is clear that, for the author, the private finance initiative does make sense, and while opposing viewpoints are acknowledged they are fairly briskly dismissed.

Courtney Smith, an economic adviser to the NHS Executive, includes the customary disclaimer that the opinions expressed are his own, though the case made for PFI is pretty much the Labour Party line of value for money, achieved through best risk allocation (on which there is an interesting section) and private sector innovation (on which there is less to say).

With PFI established as a desirable destination by page 44, the bulk of the book is devoted to how best to get there. This means that major principles sometimes appear as throwaway lines. Surely the assertion that 'competition is ultimately the best guarantor of value for money' deserves at least the standard exam question coda - discuss, with examples? And is it good enough that 'independent work. . . found evidence of significant net savings from the early health schemes'? Probably not when both David Hunter (HSJ, Live from Leeds, 14 October) and the National Audit Office, as Mr Smith later acknowledges, have observed that these remain hypothetical.

Taking the health sector as its main focus, we are given useful summaries of guidance on the PFI process: business cases, approvals, procurement and output-based specifications (a topic in need of irony if ever there was one) are all covered. There is, perhaps, too much duplication of other readily available sources and a doubtful shelf-life for some items.

If rumours are correct, the description of the workings of the capital prioritisation advisory group may soon be of only historical interest.

The book features two case studies, of which the first, written by the evidently still campaign-weary chief executive of Calderdale Hospital, would be an instructive starting point for readers new to PFI. This candid account of a first-wave project, where 'most meetings seemed to involve lawyers. . . (with)the agenda. . . very much taken out of the trust's hands', supports Mr Smith's arguments for how much the PFI process has been improved. The 'tramlines' of standard contracts now introduced should help to keep future projects on track.

The second case study describes an information services and technology project at Liverpool Women's Hospital and offers some useful lessons, including the importance of managing expectations, which has a relevance to PFI generally.

In a brief conclusion, Mr Smith discusses some interesting future directions (new-variant PFI? ).

These include cross-trust, health action zone-wide and even intersectoral projects. Unfortunately, the author does not elaborate on what his suggested joint education, prisons and health scheme would look like (readers' suggestions welcomed). He also sees a future for PFI as an export opportunity, making an analogy with how 'latecomers' learned from Britain's experience in the industrial revolution. Now that makes sense.

Doesn't it?

John Kelly Director, RKW Health Care Strategists