The role of the private sector in the delivery of public services has been under intense scrutiny of late. It has been a year overshadowed by high-profile failings, perhaps most notably the collapse of Carillion. But while this could provide the impetus for a radical rethink, the national political debate is divided along party lines on an ‘in-house versus outsourcing’ debate between Labour and Conservatives. This distracts from the real challenges at hand – delivering high quality outcomes in a context of increasing complexity and rising demand.
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 culture and practice of partnerships between the public and private sectors. This is necessary not only in light of high-profile failings of some contracts, but also based on evidence of a shift in the nature of partnerships themselves.
Survey findings from our Leadership Index reveal a declining appetite for outsourcing amongst local government. We asked leaders, chief executives and mayors of councils across the UK about their plans to outsource over the next two years. Only 15 per cent indicated that they intend to outsource more. A significant minority (39 per cent) said they would outsource less and half indicated no change (46 per cent). But meanwhile, other evidence shows a rise in some forms of partnerships – for example joint ventures for housing delivery.
As these shifts take place, we argue that a new model of partnership between the public and private sectors is required to drive social impact and create wider value over the long term. To that end, we have identified five guiding principles that would result in partnerships that are truly changemaking:
- Collaborative: An integrated approach across the public and private sector in favour of a territorial and risk averse culture.
- Creative: A willingness to explore new ideas and take a problem-solving approach, leaving behind process-driven and unimaginative ways of working.
- Adaptable: A flexible and considered approach that allows for changes over time and shifts in demand.
- Accountable: Taking responsibility for creating outcomes that are in the best interests of the public instead of a closed-door and unaccountable culture.
- Place-based: Working in a way that seeks to create value in a place rather than a narrow and centralised approach.
For these principles to be achieved in practice, a deeper system shift must occur. Our report sets out recommendations to change the framework within which partnerships operate. These recommendations include:
- The public sector should replace social value with a much stronger measure of social impact.
- The private sector should accept accountability to the public through an accountability code of conduct that includes full data disclosure and open booking accounting on large public sector contracts of £1 million and over.
- The Government needs to immediately undertake a substantive review to identify the steps needed to provide greater transparency of private contracts.
Taken together, these recommendations establish tangible steps that the public sector, private sector and the government can each take to support changemaking partnerships, to ensure they are fit for purpose for twenty-first century demand challenges.
NLGN’s report From Transactions to Changemaking: Rethinking partnerships between the public and private sectors is by Trinley Walker and Sarah Lawson.