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The New HM Treasury Joint Venture Guidance

Infrastructure UK (IUK). IUK announced as part of December Pre-Budget ReportBrings together HM Treasury's PPP policy team and Infrastructure Finance Unit with Partnerships UK Infrastructure UK objectives:develop strategy for UK's infrastructure for next 5 to 50 years identify and attract new sources of private sector investmentmanage Government's investment in the 2020 European Fund for Energy, Climate Change and Infrastructuresupport HM Treasury in prioritising investment in infrastructur9453

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The New HM Treasury Joint Venture Guidance

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    1. The New HM Treasury Joint Venture Guidance James Ballingall, Head of Legal, Partnerships UK Alan Couzens, Project Director, Partnerships UK

    3. Why use a joint venture (JV)? Offer a new way for the public sector to do business Offer a new way to deliver social benefit Specific applications: Programme/service delivery – long-term programme delivery and service partnerships Value capture/retention – exploitation/commercialisation of tangible assets such as land and property Route to market – IPR or product development and spin-outs Redefining the public private interface

    4. Why now? Social need Policy lead: Infrastructure Procurement: delivering long term value - Section 2.35 Smarter Government (use of JVs) Legislative impetus: Limited Liability Partnership Act 2000 Changes to accounting rules (FRS 9 and IAS 31) Tighter procurement legislation Capability and market building

    5. Where might they be applied? Public service delivery (health, offender management, social care, childcare, etc) Community health infrastructure Back office services Commercialisation Local housing companies and other forms of local authority asset backed partnerships Regeneration and housing Increasing use of JVs by public sector bodies beyond original “Wider Markets” use

    6. Where did we start? Focus on Wider Markets Initiative (WMI) and route to market JVs Based mainly on companies limited by shares (CLS) Excluded partnerships (LPs and LLPs)

    7. What do we mean by a ‘joint venture’? Public to public: Pooled budget Joint commissioning/promotion Corporate structures Third sector partnerships Social enterprise vehicles Public to private: Contractual PFI and hybrid models Frameworks & alliances Corporate joint ventures

    8. …and it’s never simple is it?

    9. So what’s covered by the new Guidance?

    10. Some new areas of focus… Understanding the respective objectives of the partners Powers of various public sector bodies Levels of control and related impacts: Classification Accounting (IAS 31) State aid 50:50 deadlocked JV normally classified to private sector Appraisal and VfM considerations Classification and HMT/ONS approval process Governance, conflicts & dispute resolution Competition and procurement issues

    11. JV Guidance consultation progress Formal consultation launched 15th Oct ’09 Consultation ended 31st January Feedback positive but recognition that: drafted for a broad target audience need for overarching options framework work already underway on simplified sector specific guidance Final version to be issued in March

    12. Questions?

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