• Opinion
  • November 9, 2018
  • 7 minutes
  • 1

Five ways to make public private partnerships fit for the 21st century

Opinion: Political debate is stuck on the “outsourcing” versus “in-house” divide

public private partnerships

This opinion piece was written by Sarah Lawson, a policy researcher at New Local Government Network. For more like this, see our cross-sector collaboration newsfeed.

The role of the private sector in UK public service delivery has been overshadowed by recent high-profile failings. Perhaps most notable, the recent collapse of construction company Carillion, which demonstrated a precarious operating model of introducing risk through acquiring too many contracts and operating on narrow margins.

While this could provide the impetus for a radical rethink, the country’s political debate is divided across the two principal political parties over an “outsourcing” versus “in-house” debate. This distracts from the real challenges facing public services, which are far from unique to the UK — increasing complexity and rising demand.

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NLGN’s new report, From Transactions to Changemaking: Rethinking partnerships between the public and private sectors, sets out a vision for a fundamental change in the culture and practice of these partnerships and how they operate within wider communities.

Amidst evidence of local government’s declining appetite for outsourcing, we argue that for future partnerships to be truly changemaking they must embody five core principles, drawing on existing good practice.

1. Collaboration: An integrated approach across sectors, rather than a territorial and risk-averse culture.

Collaboration can be exemplified through co-commissioning; consortium bids; proactive relationship management — and a large new sewage development in London.

Yes, you read that right. The Thames Tideway Tunnel project demonstrates a core feature of collaborative partnerships through effective management of risk between the partners involved. A government support package provides financial support if low probability but high-impact risks occur, such as disruption of underground transport. It’s an example of a clear and actionable understanding of risk.

2. Creativity: A willingness to explore new ideas and take a problem-solving approach, leaving behind process-driven ways of working.

Changemaking partnerships demonstrate creativity, be this through enabling new ways of working in procurement, providing space for creative thinking or encouraging the adoption of diverse approaches.

Preston council is exemplifying a creative approach to procurement through its community wealth-building approach. It is working with anchor institutions to help retain procurement spend locally, benefitting the local economy and community. As well as convening diverse stakeholders in the area, the council’s own practices and tender documents include wider considerations. For example, the council pays all staff the living wage and encourages businesses to lead the way in good practice such as delivery of high-quality apprenticeships.

3. Adaptability: A flexible and considered approach that allows for changes over time and shifts in demand.

Adaptability can be achieved through means such as dividing contracts into discrete phases or introducing break clauses, which can be especially important in a complex and changeable service delivery environment.

Adaptability is evident across both local and larger scale partnerships; our research uncovered high levels of adaptability in the building, design and refurbishment of a local leisure service in Braintree, UK.

This division reflected the unique skill-sets each phase required to deliver a high-quality service. This is in stark contrast to many existing Public Finance Initiative deals to provide leisure centres in the UK, which are rigid, unnecessarily costly and prevent the creation of long-term value in a place.

4. Accountability: Taking responsibility for creating outcomes that are in the best interests of the public.

High levels of transparency and accountability can be embedded through data disclosure, open book accounting and genuine public engagement. Copenhagen has been commended for innovative public private partnerships and citizen involvement in public service delivery.

For example, urban regeneration projects, called Områdeløft, involve three deep phases of citizen engagement, ensuring the community are actively involved in planning, implementation and anchoring of these projects. It is part of a wider transformation of planning from a closed and technocratic process to one that is participatory and inclusive.

5. Place-based: Moving beyond siloed and centralised approaches, to integrate and create long-term value in a place.

The impact of a partnership will have implications far beyond one organisation and its balance sheet, and this complexity can only be managed by considering places as a whole. Preston’s community wealth-building approach demonstrates the benefits that can be achieved through pushing the boundaries of the UK’s Social Value Act to create genuine social impact.

This is just one example of the benefits that can be achieved through the public sector broadening its lens and recognising the interdependencies involved in its decision-making.

A new era

Scratching the surface of our report findings, these examples demonstrate existing changemaking practice in partnerships between the public and private sectors. But for these changemaking principles to be achieved at scale, a deeper system shift must occur.

Our report puts forward key recommendations, from a renewed approach to social impact to a new accountability code of conduct for large public sector contracts. Drawing on positive practice to date and through coordinated cross-sectoral action, this system shift can ensure that partnerships are fit for the demands and expectations of the twenty-first century. — Sarah Lawson

(Picture credit: Unsplash/Christopher Burns)


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