Public private partnerships: the benefits and the pitfalls

Local authorities have a long history of working with the private sector. They've outsourced services, entered into strategic service delivery partnerships, been involved in PPP and PFI schemes and created joint ventures. The results have been mixed. Regardless of the outcomes however, the Browne Jacobson survey of local authorities [http://www.brownejacobson.com/resources/survey_reports/shared_services_survey_2011.aspx] suggests that more councils expect to deliver public services through or with the private sector in the coming years. This, then, is my guide for town hall commissioners: Be clear about your motivation for working with external partners. Knowing your purpose will help you to be clear about how to achieve it. The following are some potential motivations to consider: wishing to drive down costs and expenditure wanting to extend capacity desiring to transform outcomes seeking capital investment supporting personalisation by offering users a greater choice of provider and services wishing to create employment in the local areas by attracting additional jobs requiring suppliers to support third sector and social enterprises in service delivery Be clear on the underlying strategic objectives These must flow from the overarching strategic vision for the place and the authority. Examples might be: "we want the best outcomes for our citizens – regardless of who delivers services but with excellent employment conditions" Identify needs first, then decide how to meet these needs. Decisions should flow from intelligent, strategic commissioning. This should result in meeting the clearly identified needs effectively and efficiently irrespective of who provides. Understand the mindset of external suppliers Councils must understand that potential suppliers are driven by commercial goals and the nature of the market. It's imperative that local authorities identify the employees with the best commercial skills or provide training in these to those who need them. To attract and gain the best from a relationship, councils must be exemplar clients This means: incentivising and rewarding providers for delivering the required (and best) outputs and outcomes avoiding bargain basement and adversarial procurement which inevitably leads to poor service outcomes ensuring operational and financial transparency and accountability remembering wider factors such as employment, the local economy and social and environmental goals when choosing the model of engagement. Effective partnering requires investment in relationship building This costs both time and money - but is vital if the relationship is to work. Let me end on a health warning: rushing towards an outsourcing solution, believing it to be the easiest option for addressing current financial pressures is full of potential unintended consequences. In particular, it will be a seriously retrograde step if councils return to price-driven, short-term contracting at the expense of quality service, staff working conditions and long term outcomes. Partnership outsourcing can be successful but is no panacea, and like any partnership, it needs to occur for the right reasons and should not be entered into lightly. John Tizard is director of the Centre for Public Service Partnerships This content is brought to you by Guardian Professional. Join the local government network for more like this direct to your inbox.