Public-Private
Partnership and Private Finance Initiatives in the EU and Spanish Local
Governments
Dr.
Lourdes Torres
Dr.
Vicente Pina
University of Zaragoza (Spain)
Ftad de CC.EE. y Empresariales
Gran Vía 2
50005 Zaragoza (Spain)
e-mail: ltorres@posta.unizar.es
Fax:+34-976 761769
ABSTRACT
In the EU
countries an externalisation of the municipal public service provision
–outsourcing–, is taking place, separating the responsibility of attending to
the basic needs of the citizens from the management of public services as a way
of improving efficiency.
In the public-private partnership initiative (PPP), the public sector
contracts services on a long-term basis so as to take advantage of private
sector management skills and transfer the financial risk. This includes
concessions and franchises, where a private sector partner takes on the
responsibility for providing a public service, including maintaining, enhancing
or constructing the necessary infrastructure.
This paper analyses the
different public-private partnership initiatives carried out by EU and Spanish
local governments in the framework of public sector reforms. In the first part
we analyse the degree of externalisation in the public services delivered by
the most important EU cities and the kind of organisation chosen to provide
them. In the second part we study the different methods of PFI applied in Spain
and the accounting, auditing and monitoring of these kinds of contracts.
The
results of our survey show that almost all EU local governments provide similar
services, that there is a high degree of PPP initiatives in the delivery of
local government services, and that PPP is concerned with those activities
which do not constitute the core of Public Administration. This means that an
important part of the activity controlled by the local governments, which are
politically and, in many cases, also financially responsible, are not reflected
in their individual annual accounts. Because of this, local governments will
have to implement accountability and monitoring tools, such as PPP and PFI
accounting standards, consolidation of annual accounts, regulatory bodies and
value for money audits in order to assess the performance of local services
delivered under PPP initiatives, and to prevent monopoly abuses.