Back in June our friends and colleagues at the excellent Institute for Fiscal Studies (IFS) produced another high quality report on the evolving thinking around models of public private contracting.
The context of the report was the widespread acceptance that outsourcing – as a general model – has failed. IFS observe that “After four decades of successive governments extending the role of the private sector in government work, there is growing interest in bringing services back into government hands.” Partly the Covid-19 crisis has shown the value of government intervention, partly the risk transfer models at the heart of PFI have shown to be ineffective, but more generally there has been a growing consensus among policy makers, purchasers and suppliers that we need to change the model. As IFS notes, in 2018, the Cabinet Office acknowledged that government had not always got decisions to outsource right – and that at times this had resulted in poor value for money.
Put starkly, the problems with outsourcing are both of quantity and quality. Because it was seen “as the only game in town” for so long, there has been too much of it, it has been pushed too hard in the wrong areas and it has been undertaken in ways which ignored significant behavioural, cultural and environmental dependencies.
Acknowledging that outsourcing is the site of policy failure, the IFS report identifies four circumstances in which the government should consider returning a service to the public sector: an unhealthy or uncompetitive market; the need for flexibility to make changes to the service; a lack of government commercial skills to manage an outsourced contract successfully; or a need to improve the service by integrating it with another. This is a major analytical contribution to the debate and colleagues at the Centre of Partnering welcome it.
The area of the debate, that we at the Centre for Partnering see as our unique focus is understanding how partnering adds value through collaboration. While the location or distribution of services can be important, it is not the full picture. Performance in public services depends on both the hardware of formal, legal structures, but also on the cultural software that animates them.
An iPhone without the iOS operating system is worthless. Both are necessary but insufficient conditions for a working smart phone. It is similar in organisations. We need both governance and people; structure and culture. And they need to be understood not as a dualism, but as an interdependency. The relationship that brings them together, makes them work.
It is this idea of relationships in partnering, based on our experience in business, public service and academia, alongside a growing literature, that underpins our thinking at the Centre for Partnering.
The CfP believes that public service partnering – involving private companies, civil society, local government and the community and voluntary sector – is at its most effective when based on a mutual recognition of each other’s role, purpose, constraints and motivations. When a relationship is based on the recognition of the other’s needs, and the parties’ interdependence, then it becomes an endeavour based on partnership and mutual realisation that moves beyond individualistic goals and abstract contracting.
Our agenda at the CfP is to explore how this idea of a relational culture, what role it plays and how it can be generated. We will do so through high quality research and by engaging with practice and policy
Be in touch if you want to be part of the journey!