Are Public Private Partnerships value for money?

TLDR

Public‑Private Partnerships raise complex accounting questions, with the key issue being whether they deliver good value for money rather than merely being on‑ or off‑balance‑sheet, yet academic and practitioner engagement on this topic remains limited. This paper seeks to bridge that gap by engaging academics and practitioners in a comparative discussion of value‑for‑money tests across several countries. The authors conduct a comparative analysis of value‑for‑money testing approaches in multiple countries, juxtaposing academic critiques and practitioner practices.

Abstract

In an earlier article in this journal (Grimsey, D., & Lewis, M. K. (2002b). Accounting for Public Private Partnerships. Accounting Forum, 26(3), 245–270), we examined the intricacies of the accounting issues raised by Public Private Partnerships (PPPs). It was argued that the critical accounting question from the public sector's viewpoint is not one of whether the arrangement is on or off balance sheet, but whether it represents good value for money. However, determining value for money for a PPP is an area in which, despite strong criticisms by a number of academic writers of the methods used by practitioners to evaluate value for money, surprisingly little engagement has taken place between the practitioners and the academics on the issues involved. This paper attempts to provide such an engagement. At the same time, because many of the academic critiques focus on the situation in one country (particularly the UK or Australia), we try to put matters into a broader, comparative context by considering approaches to value for money tests in a number of countries. Our examination is thus comparative in the sense of considering value for money tests in different countries, while also comparing the views of academics and practitioners.