How can more private sector capital be directed into funding key public sector projects and programmes? Wayne Butcher talked with two representatives from Phoenix Group about their experiences lending to the public sector, the opportunities they see and how public bodies can benefit.
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The UK has a confirmed need to deliver major public sector projects and programmes across housing, transport, health and education. But with a difficult fiscal environment for central government and local authorities facing expenditure challenges on the ground, delivering on these ambitions isn't easy.

We looked at how private sector investment can help boost economic growth and infrastructure delivery, and the benefits of private capital. For example, the flexibility and ability to tailor cashflows to meet the needs of the borrower provides a distinct advantage when compared with some public capital sources. There's also the ability to use partnership as a method of driving value.

We also looked at why the public sector can offer an optimal environment for investors: from opportunities for patient capital, to using its covenant strength to drive investment pipeline, to meeting the ESG requirements of many investors.

Three takeaways from our conversation:

  • Financial flexibility – private sector investors can structure more innovative financing solutions to aid affordability, and combine concepts from infrastructure and real estate finance against local authority finance architecture to unlock projects and overcome barriers to success.
  • Investment environment – public sector investments contribute significantly to economic growth and wider regeneration, and provide social value; with environmental, social and governance (ESG) factors increasingly important to private investors, the public sector should grasp the opportunity to be part of this wider strategy for private capital.
  • Regeneration role – outcomes of projects that use private sector capital can include creating jobs, delivering houses and boosting growth – all key parts of government policy; use of private sector capital can accelerate delivery of these aims and at scale, which is often a critical aspiration of public sector stakeholders.

Watch the recording to find out more about the potential opportunities: 

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For more insight and guidance, get in touch with Wayne Butcher.

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