Murray, Alex (2018) Returns on public capital investment: Procurement, whole life cost and value in English schools and hospitals, from 1997-2012. PhD thesis, University College London, UK.
Abstract
The UK government has for many decades assumed the role of provider for a range of public services (and the assets that underpin them) considered essential to the functioning of society. Education and healthcare in England have remained almost entirely publicly funded under the administration and management of central government departments and local authorities. The need to maintain and invest in the public service assets (PSAs) that support delivery remains, regardless of whether their ownership is public or private. The business cases for investment involve social cost benefit analysis assessed against the budgetary constraints of fiscal affordability. This thesis attempts to identify the information used, and ideally required, to make decisions to invest in building schools and hospitals. The role of procurement method is considered alongside the forms of capital work (refurbishment / new build) in recent capital programmes for schools and hospitals. Theoretical frameworks for analysis of the efficacy of capital investment are drawn from the whole life cost (WLC) literature and discourses on decision making under uncertainty, contract theory and transaction cost economics. New methodological contributions on the valuation of whole life cost returns, including those from improved outcomes in the form of educational attainment in schools, are presented in later analysis chapters. Key findings include: 1) the estimated whole life cost ratio of 1 (construction) to 0.5 (operation) to 5 (staffing) for schools over a 60 year life discounted at 3.5% and, 2) a lack of association in improved educational attainment following capital investment. Further, findings suggest that given the durable nature of PSAs, along with the long time periods over which benefits accrue, there is considerable difficulty in appraising the returns to (and value of) capital investment in PSAs. Recommendations focus on the need for better co-ordination of government data on capital programmes and projects, on-going costs of operation and the outcomes of PSA users to better inform investment appraisal and programme design.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | Ive, G and Pantelias, A |
| Uncontrolled Keywords: | co-ordination; education; ownership; procurement method; transaction cost; uncertainty; contract theory; healthcare; hospital; new build; schools; capital investment; decision making; government; investment; refurbishment; owner; England; UK; cost benefit analysis |
| Index terms: | decision-making, affordability, business case, society, capital investment, cost benefit analysis, transaction cost, whole life cost, programme, local authority, ownership, investment appraisal, procurement method, England, new build, owner, public services, contract theory |
| Subjects: | contractual arrangements, legal systems, strategic project management, economic analysis, Geography, communities and social development, financial analysis, data analysis and analytics, construction integration, economics, administrative law, project controls, decision analysis, sociology |
| Topics: | Geographical Context, Project Management, Risk Management, Procurement, Legal Issues, Business Strategy, Cost Management, Research Practice, Stakeholder Management, Time Control, Organizational Design |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here