Assessing Value for Money in PFI Projects: A Comparative Study of Practices in the UK and Italy

The Value for Money assessment is a critical process in procuring a Private Finance Initiative and it requires accurate ex-ante performance measurement methodologies. The British Government has set new requirements for evaluating VFM through a new assessment model composed of three main stages, namely: programme level assessment, project level assessment, and procurement level assessment. The objective of the new model for VFM assessment is to change the costly, inflexible and opaque side of PFIs in order to deliver cost-effective and improve the quality of public service provision. A theoretical analysis of the implementation of PFI shows the UK as the leading user of this procurement in Europe and Italy is the second. However, there is a disparity in the manner PFI is actually implemented in these two countries and especially how VFM is assessed. Aiming at underlying the best practices of this evaluation process for the most achievable VFM, this paper presents the new VFM assessment model of the UK and a suggestion for its potential application to the Italian PFI procurement process to improve outcomes therein.