Beyond Contract
1 March, 2005

Warren Hatter, Head of Research, NLGN and Stephen Reeve, University of Brighton
Local Government News

Warren Hatter and Stephen Reeve argue that recent research reveals that a new type of manager has crept up on us unawares, along with the need to understand them and develop their specialist skills.

Over the past few years at the New Local Government Network, we have made it our business to understand and highlight developments in the way leading-edge local authorities (and sometimes their private sector partners) deliver services. Until now, the stories we tell have often been about new things being done. Increasingly though, this is changing and the story is about things being done differently.

Our research on developments in partnership has given us much insight into the way that some local authorities are using partnership to deliver things that we would never have considered ‘partnership material’ a very few years ago. Just as striking is what we have learned in joint research with the University of Brighton, which led to a recent report, Beyond Contract.

Aspiring to see how partnership looks from the point of view of those involved, we found out – and then some. The overall impression is of an area of management – or of service delivery – that has changed massively without this being recognised. Everybody expects change, and some of us even embrace it, but we sometimes do not realise the effect it has on us.

What makes us say this? Our belief, based on research among a group of senior practitioners running public-private and public-private-voluntary partnerships is that they have unknowingly developed a new specialism within management, within all sectors. While policy-makers have been focused on the ‘deal-making’ aspects of PPPs; while brokers and deal-makers have focused on the contract itself and the innovation that can be built in at point of signing; while research evaluations of PPPs mostly concern input-output analyses, this new specialism has been developed. This has implications for all those mentioned above.

This new breed of manager has an approach which is acutely sensitive to the specific demands of working within partnership. They are addressing a set of issues daily that set them apart from ‘conventional’ managers. Not only has the very process of managing shifted significantly, but the demands placed on individuals from operating in this new environment have changed in shape and increased in intensity.

How has this come about? Essentially, because many traditional management tools are blunted in a PPP environment. The more integrity shown in terms of trying to operate in real partnership, the more difficult this becomes. For example, authoritative ‘command and control’ tactics become ineffective; and contractual ‘arm wrestling’ is felt to be incorrect. So the stress of getting things done falls much more explicitly on individual managers’ ability to communicate, negotiate and persuade.

The managers in the NLGN research presented ‘rules of thumb’ about how to thrive in this environment, requiring full engagement of the necessary skills at an early stage for efficient and effective partnership delivery later. But to do that means a huge expenditure of emotional energy far in excess of anything in their previous experience. In effect, they are bearing some of the stress that used to be carried structurally by hierarchical procedures or contract.

The work came about following developments at the University of Brighton Business School. Inspired by managers within PPPs reporting significantly different management issues from those reported by other managers of comparable seniority, the Business School created a Practitioner Forum drawn from all sides in the PPP/PFI operational arena. The aim was to document ‘insider insight’ as to the dynamics, problems and successes of partnership structures.

Consequently, Beyond Contract provides numerous pointers on the successful operation of a partnership – and gives voice to a generally held concern about hand-over between different teams at different stages, and across complex and multiple professional and organisational boundaries. The report also spells out how operational directors and managers view partnerships in a phased, project-type fashion, whereas the pre-bid focus appears to assume a much more static cultural environment. A ‘model’ partnership timetable is suggested, elaborating which skills and approaches are most useful at which stages.

Such rapid learning in a fast evolving and genuinely innovative environment has caught both policy makers and management specialists unawares. These managers are only just beginning to see themselves as a community of people with particular skills and experiences that set them apart. The Practitioner Forum is certainly one of the first, but we can be sure that there are many more practitioners facing the same challenges but with no network to tap into.

The Implications
Beyond Contract should make a difference for local authorities. The findings suggest that there has never before been a more urgent need to support senior managers – in local government and their partners – after signatures have been exchanged. The welfare of managers from all sides of the procurement process needs to be thought about in advance given these new insights. The nature of network managing needs to be clearly expressed and debated. The skills required of such management practices need to be elaborated and thought through. The very novelty of the partnership situations needs to be much more explicitly recognised so that managers are aware in advance how idiosyncratic and case-specific their actions may have to be. From the research, it became clear that practitioners thought much greater joint efforts needed to be put in at earlier stages in terms of scenario planning and future-scoping the roller coaster ride which might lie ahead. For authorities and partners heading down the partnership route, or considering doing so, this is a useful reminder to give a lot of weight at an early stage to these operational issues.

Policy-makers also need to play a different game. National, European, and increasingly global policymaking discussion still focuses on structure, to the detriment of operational practice. There is no problem with arguments abounding, as they do, on whether various forms of PPP represent off-balance sheet lending, more efficient social outcomes, ‘dressed-up’ procurement, and so on. The problem is when these arguments exclude consideration of the processes which will have to be managed at the interface of local government and its partners. Further consideration of how efficiencies will be squeezed out, how innovation will occur and how more appropriate outcomes might be generated within a novel and very complex environment must be pursued. If these processes, and the management teams which are core to their success, do not become the subject of deeper examination, then the risk is that PPP policy-making remains too rooted in ideology, not ‘what works’. In the short-term, we have got away with this. In the longer-term, this will not work, not least because partnerships are such long-term affairs.

The research also poses a challenge to business schools across the UK to recognise the new specialisms and tailor learning accordingly. Using the innovative research vehicle of the Partnership Practitioner Forum, the research team were able to extend the facilities of a Business School to a group of managers in order to further understanding. The results have been very revealing, and provide a new perspective on the implications of actually directing and managing the successful delivery of partnership outcomes. The Forum also models much needed engagement practice between academia and ‘real world’ problems, and demonstrates that other Business Schools must take the opportunity to catch up with current, messy and as yet uncharted areas – and make a difference.

There is good news here. This new specialism has grown because of a practical focus on what works. The local government family should now be able to embrace this, and the lessons contained in Beyond Contract, because we should now see partnership as one of the ways we achieve our ever more complex goals.

Warren Hatter is Head of the New Local Government Network’s Research Unit and Steve Reeve an academic at the University of Brighton Business School.
Beyond Contract: what makes a PPP successful?
is available (priced £21.25 inc p&p) from NLGN at 7015 1386. Or visit