Impact of governance on project delivery of complex NHS PFI/PPP schemes

Purpose – This study aims to examine the impact of governance on project delivery in complex private finance initiative (PFI) projects. Governance is crucial in delivering successful projects within budget, time and in accordance with other project objectives. Design/methodology/approach – A two‐stage approach was used to address the research questions. First, a literature review was carried out and second, a multiple case study approach based on detailed semi‐structured interviews with project directors and senior managers was conducted to provide an in‐depth insight on how two major PFI projects were planned, managed and delivered in the National Health Service (NHS, UK). Findings – Project governance influences project delivery in terms of cost, speed of completion, quality and its financial viability as it is critical in providing clear organisational structure, effective decision‐making structures and control processes. The success of one scheme was attributed to an appropriate governance structure enabling necessary reviews and adjustments to be made to render the scheme financially viable and affordable. The failed scheme, subsequently abandoned at a cost of over £15 million to tax payers, was due to an inadequate governance structure creating conflicting priorities of stakeholders, complex decision making with negative impact on project deliverables such as cost and time. Originality/value – Previous research has not addressed the management aspect of governance which has a significant influence on financial outcomes of NHS PFI schemes. This will enable NHS and other public client organisations to understand the need for adequate governance structure in reducing the risks of projects running over time and incurring increase costs to ensure financial viability and affordability, particularly in large complex schemes.