As government budgets are increasingly squeezed, delivering efficient, cost-effective and measurable services is crucial. Read about how the UK is leading collaboration between local government and private industry to make this a reality

1. How the UK is leading collaboration between
local government and private industry
Harnessing the power of
public private partnerships

2. In the UK – and in fact, across the world – local governments are facing a greater tightening
of purse strings in response to the public sector reform agenda, with some £18bn in cuts in
the UK alone since 2010, equivalent to almost 20% of spending. Year-on-year cuts to local
government budgets are set to continue, with a 6.7% cut predicted before 2020.
The picture is similar across the rest of Europe – France’s most recent budget chopped local
authority budgets by €3.5bn. Spain has been strongly pressured by the EU to curb local
government spending, and Italy only recently emerged from a 3-year £21bn cycle of cuts.
Delivering efficient, cost-effective and measurable services for the 21st Century has become
the highest priority, and many have turned to Public Private Partnerships (PPPs) in order to
meet increasing customer demand while keeping costs controlled. PPPs operate across a
variety of sectors, and can take on a variety of forms.
Squeezed government
budgets and increased demand

3. The power of UK public-private
partnerships
John Major brings
in legislation
to enable first
public private
partnerships
(under PFI)
The first PPP
contract was
signed, to design,
build, finance, and
operate a 1,000
bed hospital in
Norwich
Almost 100
hospital projects
Over 800 schools More than
40 transport
projects
300 operational
projects in
sectors ranging
from defence and
waste to leisure,
culture, and
housing
1991 1996 Since 2000 Since 2000 Since 2000 Since 2000
The UK developed the concept of public private partnerships (PPPs) in 1991.
PPPs enable the delivery of efficient, cost-effective and measurable public
services within modern facilities whilst minimising the financial risk.
Countries around the world work with UK organisations to develop their own
models of PPP and deliver outstanding healthcare facilities and services.
Canada, Ireland, Portugal, Australia, Japan and Sweden are all countries
developing their own PPP models using UK expertise.

4. Partnerships mobilise the best of
the private sector
Below outlines the most common structures and methods, and the
extent and nature of the private involvement in each broad bracket:
Contracting out
Build | Operate | Maintain
Build | Own | Transfer
Divesture | Full Privatisation
Public Responsibility Private Responsibility
FNarrowly-defined contract work for finite projects, without any
changes to infrastructure ownership, for example HMRC’s PAYE
reporting rollout
F Public assets sold to the private sector, with all control and
connection relinquished. Obvious UK examples include the
privatisation of rail networks under companies such as Southern Rail
F Private sector builds and operates for a given contract length
before transfer back to public sector
(Serco refuse collection, London)
F Private sector designs and builds infrastructure, and then either
continues to operate or maintain the assets upon completion of the
project, as showcased by the Digitising Aberdeen campaign

5. Key benefits of public-private
partnerships
Customer
satisfaction
Reduces
costs for
the provider
Quick
project
delivery
Delivering
reform
Creative
solutions
Bucharest Water and
Sanitation, Romania:
Veolia won the
“operate and maintain”
bid, and Bucharest
2.2m citizens now
enjoy one of the lowest
water sanitation
tariffs in Europe
According to a British study,
only 24% of PPPs run late,
compared to 70% of public-
only projects
Eolo Wind Farm,
Nicaragua: 22 wind
turbines brought much-
needed energy to one of
Central America’s least
electrified countries
Ruta del Sol, Colombia:
Private consortiums had
to tackle three different
types of terrain in building
the $2.6bn highway to the
capital Bogotá
Outpatient Dialysis
Services, Romania:
The PPP operator
has invested almost
€30m in upgrading and
expanding facilities
Public
Private
Partnerships

6. Top tips on building successful PPPs
F Reducing costs
and expenditure?
F Extending
capacity?
F Incentivise and
reward providers
F Be transparent and
accountability
F Working with
a commercial
mindset
F Collaborating to
help suppliers meet
their objectives
F Facilitate social
cohesion?
F Create greater
convenience?
F Avoid rushing
F Establish
a sense of
cultural fit
Be clear about
your motivation
for working with
external partners.
Be the best client
your partner has
ever had.
Understand the
mindset of external
suppliers.
Be clear on the
strategic objectives.
Invest in building
the relationship.

7. The power of UK PPPs
Enrst Young
Transport
TelecommunicationsOther
Social Infrastracture Power Environment
F 1146 housing and local government
relationships serving 34m customer
transactions each year
F 34 utilities relationships serving 266.8m
customer transactions each year
F Pay for bills and services across 1,500
companies from British Gas to Virgin
to Xbox
F 29,000 stores across the UK 10m
customers transactions each week
Local governments are under heavy budgetary constraints.
By embracing innovation and entrepreneurialism over
restricting service provision, local governments can use
private partnerships to transform services. Since 2004,
social infrastructure have accounted for the vast majority
of UK Public Private Partnerships, with transport and
environmental concerns also prominent in the mix.
90
80
70
60
50
40
30
20
10
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Social infrastructure is driving public private
partnerships in the UK – PayPoint is at
the forefront of this trend with its 1,146
partnerships with local government.

8. London Underground is the
largest and most high-profile
public private partnership
of its kind anywhere in the
world.
The PPP involves £37.7bn
of investment over 30
years and £4.6bn of private
funding.
The partnership requires the
partners to maintain and
enhance the performance
of the underground network
across:
F Availability of systems
(avoidance of delays)
F Capability (average
passenger journey time)
F Ambience (condition and
cleanliness)
Capita have partnered with
Aberdeen council to digitise
and interconnect public
service infrastructure.
The connectivity will provide
the Council with the ability
to increase bandwidth and
enhance digital services to
schools, leisure centres and a
range of other council owned
sites. shared infrastructure
and services, which is
lowering costs and improving
connectivity across the
whole public sector in
Scotland. more than 4,300
sites and 5,300 circuits have
been connected.
Cap Gemini partnered to
help the UK tax authority
make it easier for tax payers
to ensure collections and
payments are correct.
Employers submit salary
information from a choice of
over 400 suppliers or free
tools provided by HMRC
and Cap Gemini’s systems
processes payroll data (tens
of millions of transactions
a month ). Analytics and
business rules automate
messages to employers and
update debt management
systems.
The partnership has made
HMRC’s records more
accurate, up-to-date and
has reduced cases where
individuals have under or
overpaid tax during the year.
St Bartholomew’s (Barts)
and the Royal London
Hospitals in London are
being redeveloped in
partnership with Skanska.
Annually, the hospital cares
for over 700,000 people
but the hospital had been
under invested in for several
decades.
Skanska constructed and
refurbished a total floor area
of 277,650 m2 and increase
the number of patient beds
from 1,062 to 1,248.
Over 400 individuals,
including clinicians, patient
and community groups took
part in a detailed evaluation
of the redevelopment plans.
At peak, the construction
workforce consisted of
around 1,800 workers.
London
Underground
Digitising
Aberdeen
HMRC PAYE
reporting
London Royal
Project
UK public private partnerships in action

9. Localising the PPP model:
PayPoint launches cash-out voucher
scheme for local government
Challenges:
F Staff needed an efficient way to assess legitimacy of claims for £100 crisis vouchers, processed through
one system.
F Once the claim is deemed legitimate, the staff needed to find a way to distribute the voucher to the
claimant.
F The 2012 budget ultimately reduced available local council budgets and “emergency payments” were
devolved to local governments, inflating running costs.
Solution:
F PayPoint created and distributed a portal for 22 local authorities in April 2013. By July, the number had
increased to over 50. The quickest voucher redemption was just 45 seconds after being issued.
Control placed in
authorities’ hands
Accountability and
visibility through
technology
Internal transparency,
authorities able to run
reports on staff
Ease of voucher use:
can be redeemed at any
one of the UK’s 29,000
PayPoint stores

10. Localising the PPP model:
PayPoint works with Citibank to
replace giro chequing systems
Challenges:
F There are 1.5m Britons currently without access to a bank account, a demographic that disproportionately receives
government benefits such as pensions and child maintenance.
F The cost of remaining unbanked as an individual is an estimated £1,300/year.
F Local government required a simple and cost-efficient way of delivering benefits payments, replacing outdated old
Giro cheques.
Solution:
F PayPoint implemented the Simple Payment service in partnership with Citibank, streamlining the payments
process and delivering cost-cutting for local government.
Benefits:
Payments available at over
10,000 PayPoint outlets from
Land’s End to John O’Groats
£15m estimated savings for
local governments, taking on
administration and infrastructure
responsibilities
871k transactions a year
dispensing £167.6m to
customers

11. Public-private partnerships in Europe
A multinational
consortium partnered
with the Portuguese
state to build and
manage an upgraded
167km highway on the
west coast, servicing
between 9,000 and
12,000 vehicles daily, for
a cost of €250m
The UK Department
for Transport, London
Continental Railways,
Rail Link Engineering,
and Network Rail
delivered the Channel
Tunnel project on time
and within budget in
September 2003
A consortium led by IBM
collaborated with the
German Health Ministry
on the bIT4health
initiative (better IT for
better health), provided
electronic patient cards
for 80m individuals.
HPC Ukraina
was awarded a
contract to expand
the capacity of
Container Terminal
Odessa (CTO),
adding 700,000
to the existing
2,250,000 TEU
capacity
Austrian renewable
energy company RP-
Global developed a
$92m Wind Farm,
boosting Croatia’s
wind power supply
by 34%.

12. Public private partnerships: Utilities
Public-private partnerships across the world
Recurring episodes of conflict Leaks in the water distribution network
Recurring episodes of conflict and a challenging political-
economy in North Lebanon contributed to serious power
shortages in the country.
The Government partnered with Butec Utility Services
upgrade, maintain, and operate the electricity distribution
network.
Leaks in the water distribution network of Bucharest
meant water losses were nearly 50% and costs were
unmanageable.
The government partnered with Veolia to upgrade and
service the system, providing Bucharest’s 2.2 million
population one of the lowest water and sanitation tariffs in
Europe.
Outcomes
F 100% of water samples taken now meet E.U.
quality standards
F Customer satisfaction increased from 46%
to 75%
F Water consumption decreased from 516 to
239 litres per person per day
Outcomes
F 350,000 households enjoy higher quality
power services
F Encourages foreign investment in Lebanon
F Decreases government losses

13. Public private partnerships:
Healthcare education
Public-private partnerships across the world
Moldova’s health care system
Moldova’s health care system suffered from outdated
equipment.
The government partnered with Magnific to renovate,
construct, equip and operate a new diagnostics centre.
Which benefits over 100,000 people annually.
Belo Horizonte in Brazil
Belo Horizonte in Brazil, has made early education a
priority and partnered with Odebrecht to construct
primary schools and preschool facilities as well as
delivering nonpedagogical services, such as maintenance
and security.
The partnership expands access to early education in the
city by 18,000.
Outcomes
F The hospital can diagnose over 100,000 pa-
tients annually
F Five per cent of annual revenues is returned
to the Hospital
F The PPP mobilized $7 million in private sec-
tor investment
Outcomes
F More cost effective construction and opera-
tion of 37 new schools
F 18,000 low-income children attending
school
F Mobilizes $95 million in private sector in-
vestment

14. Public private partnerships:
Tourism transport
Public-private partnerships across the world
Jamaica’s government
Jamaica’s government were subsidising Jamaica Air which
was costly and inefficient.
The government partnered with Caribbean Airlines to
privatise air Jamaica. 900,000 passengers benefit from the
new service, and the government eliminated their subsidy.
The government of Sierra Leone
The government of Sierra Leone has been struggling to
recover from a devastating civil war in the 1990s.
Wanting to develop it’s tourism industry, the government
partnered with Hilton Hotels to redevelop and manage a
200-room hotel in Freetown.
Outcomes
F The hotel is expected to attract 40,000 visi-
tors annually
F The Hotel employs 400 people
F The project will attract $40 million in foreign
direct investment
Outcomes
F Helping stabilize Jamaica’s public finances
F 900,000 passengers benefit from the new
service
F Jamaica secures improved public services

15. PayPoint keeps modern life moving
throughout the uk
Energy Water Media, inc. BBC TVL
Housing and Local
Government
Transport Mobile E-money
34 clients since
1996 serving
266.8m customers
16 clients since 2003
serving 13.2m
customers a year
10 clients since 2001
serving 23m
customers a year
146 clients since 2006
serving 34m
customers a year
22 clients since 2003
serving 4m
customers a year
32 clients since 2001
serving 9.4m customers
a year
16 clients since 2008
serving 7m
customers a year

16. Thank you
www.paypoint.com