Public-Private Partnerships (PPPs) - from 'transaction' to 'partnership'

Post the Autumn 2025 Budget, I’ve been thinking lots about public finances and how our governments and governments worldwide are reassessing how public infrastructure and services are financed and delivered. I am also doing quite a bit of work on the end of life of Private Finance Initiatives (PFIs) for our education clients.

We know that the traditional Private Finance Initiative (PFI) and Public-Private Partnership (PPP) models are undergoing fundamental re-evaluation. While these models have enabled significant capital projects, their design and implementation has been criticised for prioritising financial engineering over public interest. PFI was originally attractive because it allowed governments to finance large infrastructure projects without increasing public sector debt on the balance sheet. This accounting treatment created the illusion of fiscal prudence, while committing future taxpayers to long-term payment obligations. The end result was:

• Deferred liabilities: governments avoided upfront borrowing (but locked in decades of high operational payments, increasing the total cost of ownership)
• Reduced flexibility: rigid contracts limited the ability to adapt to changing public needs
• Cost escalation: private financing often came at a higher cost than traditional public borrowing

There is a recognition that things need to change. Future PPP models must move beyond cost-efficiency and risk transfer as primary objectives. Instead, they should:

• Prioritise public benefit: projects should be assessed on their ability to deliver long-term societal impact, not just short-term financial gains
• Embed social value: contracts should include measurable commitments to local employment, sustainability, and community development
• Ensure transparency: public accountability and responsible governance must be central, with clear reporting on performance and value 

As a commercial and procurement lawyer for Stone King,  the future of PPP needs to replace “transaction” with “partnership”, and not just focus on narrow asset delivery. Proper system stewardship is needed. When the original PFIs/PPPs were put in place the “social” element was not given sufficient weight. Contracts were transactional and overly weighted on the “asset”  (i.e. the building, the services).  

It would be good to see future models co-designed and increasingly rewarding partners for achieving defined social or system outcomes –such as reduced carbon emissions, improved patient flows, or enhanced digital connectivity. This will allow both partners (public and private and perhaps others such as VCSEs) more room to innovate in how they deliver value. Instead of specifying inputs in detail, our public authorities absolutely could encourage multidisciplinary collaboration. PPPs are long term contracts and agility is key. Contacts must be living and breathing documents and they need to be responsive to change – like any true partnership would be.

Ending on an optimistic note,, it is great to see that social value is no longer being seen as a “nice to have.” The Civil Society Covenant and the new Office for the Impact Economy are strong signals that social value will have a more prominent place. Social value (not just the tick boxing stuff!) is becoming integral to public procurement policy and an essential measure of infrastructure success.  

The work we are doing at Stone King is very much focussed on getting public authorities to use procurement not just as an economic lever but as a social lever. 

I am a hopeful person – Stone King will continue to advocate for public-private collaborations that are:

• more balanced between public and private interests;
• partnership focussed;
• more transparent and accountable;
• are for public benefit;
• more socially and environmentally responsible; and
• more flexible, responsive to technological change, community needs, and long-term societal challenges.

Coupled with strong governance and meaningful social value commitments, the future of PFI and PPP could move decisively beyond the limitations of the past  – toward partnerships that genuinely create lasting value for society.