Building more than public trust in public private partnerships

July 17, 2018   By Sarah Lawson, Policy Researcher, NLGN

Last week saw another report released in the wake of Carillion’s collapse. “After Carillion: Public sector outsourcing and contracting”, a new report from the Public Administration and Constitutional Affairs Committee, offers valuable insights to guide the future of public private partnerships (PPPs). These range from the importance of focusing on the quality of outcomes over short-term price incentives, to the need to allocate risk more responsibly and effectively between partners. This timely report pushes for a much-needed shift away from transactional models of public service delivery towards a relational approach, underpinned by shared values and the government developing a deeper understanding of the market and its partners.

But one area where this relational change could go further is in the involvement of the public. While public trust is an important thread that runs through the report, the emphasis is on informing the public of decision-making rather than more active forms of engagement. A new approach to PPPs requires a fundamental shift in how the public are involved in the design and delivery of public services more broadly. This would root PPPs in the priorities of people and places, challenge traditional power relationships and ultimately achieve better outcomes.

The Public Administration and Constitutional Affairs Committee is spot on when it says: “what matters is that the service works for the people who use it in their everyday needs”, followed by “while at the same time providing value for money for the taxpayer.” Yet the two points are too often seen to be in opposition. A service that doesn’t meet user needs, for instance in its opening hours or accessibility, will likely be underused and leave the public sector to pick up the costs elsewhere in the system. The report highlights the damaging costs of the “constant renegotiation” of contracts – since 2016, 12 contracts worth more than £10 million have had to be significantly renegotiated. This, in part, often stems from a poor understanding of service and user needs from the outset, further compounded by issues such as the significant data gaps on cost and performance of existing services. Far from being a tick box exercise, a genuine understanding of public demand saves money and drives higher quality outcomes.

The report also stresses that “modern outsourcing is more fundamental and more complex”. This results from factors including changing demand pressures and the subsequent need for more diverse and adaptable service delivery. For example, an ageing population coupled with the rising prevalence of multi-morbidities means a social care service designed for the needs of the population 20 years ago, won’t cater for the needs of today. Strong recommendations are put forward in response to this complexity, including a pause on the roll-out of payment-by-results models which often focus on outputs over long-term outcomes. And while developments in areas such as data analysis are improving the ability to forecast demand, understanding such complexity also rests on gaining a genuine perspective from people within that system. Complexity isn’t an excuse to not include the public but an imperative to do just that.

This report rightly calls for a new relationship and alignment of values between the public and private sector. But this relationship must go further to involve the public in more meaningful ways. This might include deeper consultation before contracts are signed; transforming the role of elected members – by providing further opportunities to engage them in the management of contracts and partnership relations, as well as an avenue through which to involve the public and hold partnerships to account; and creating opportunities rather than barriers to local, decentralised innovation.

While it’s important to learn the lessons after Carillion’s collapse, moving beyond Carillion – in a context of funding gaps and complex demand – means fundamentally questioning the system in which PPPs are operating. NLGN’s current research project – Rethinking Public-Private Partnerships, supported by Engie, Jacobs and Weightmans – seeks to unpack some of these issues and establish principles to guide a new model of PPP service delivery.

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