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The New HM Treasury Joint Venture Guidance

The New HM Treasury Joint Venture Guidance. James Ballingall , Head of Legal, Partnerships UK Alan Couzens , Project Director, Partnerships UK. Infrastructure UK (IUK). IUK announced as part of December Pre-Budget Report

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The New HM Treasury Joint Venture Guidance

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

  2. Infrastructure UK (IUK) • IUK announced as part of December Pre-Budget Report • Brings 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 investment • manage Government's investment in the 2020 European Fund for Energy, Climate Change and Infrastructure • support HM Treasury in prioritising investment in infrastructure • support the delivery of major infrastructure projects • Chairman of Infrastructure UK is Paul Skinner • Chief Executive of Infrastructure UK is James Stewart

  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? Kier Sheffield LLP

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