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From transactions to changemaking: Rethinking partnerships between the public and private sectors

Authors: Trinley Walker and Sarah Lawson

The UK relies on the private sector to provide many services to the public, and the presence of the private sector is interwoven into the delivery landscape. The government spends more on procuring goods and services from private providers than it does on staff costs. Recent high-profile failures have shone the spotlight of public attention into this pervasiveness. The collapse of Carillion, the second largest construction company in the UK, demonstrated the potentially precarious operating models of some companies providing public services.

Yet the national political debate is polarised. The Conservative Government, on the one hand, seems to prefer a ‘business as usual’ approach to the role of the private sector, with rising government spend on outsourcing. On the other hand, the Labour Party advocates taking everything back ‘in-house’: leader, Jeremy Corbyn, has stated, “...what we’re saying is, the preferred option on direct services should be the public option...”. Both approaches focus on the means of delivery rather than the ends – and neither really addresses the fundamental challenge facing public services: rising demand.

When partnerships between the public and private sectors were first introduced in the late 1970s, the UK had recently joined the European Economic Community and the very first personal computer had just hit the market. The rationale for the introduction of market forces into the provision of services was to improve efficiency and cut costs in a system of direct state delivery. The trend towards an increasing role for the private sector continued under successive governments through new models, policy drivers and initiatives.

Forty years on, the world has changed significantly – modern phenomena such as an ageing society, new technological opportunities, and citizen expectations of increasing influence have emerged. These factors have significant implications for the demand pressures on public services, and the responses services are capable of. In the context of austerity, which has driven down real terms resources available for public services to keep pace with demand, there is an increasing risk that the private sector is resorted to as a cheaper option, and that risks on both sides of partnerships grow. The symptoms of this approach are widespread, from the high costs of bailouts to significant renegotiation of contracts.

This report calls for a fundamental rethink about the relationship between the public and the private sector in a changing world. It sets out the shift required to be fit for purpose – from an approach we identify as primarily transactional in nature, to one which is genuinely focused on changemaking, with real and deep impact for the public. We identify how at their most transactional, partnerships can be territorial, processdriven, rigid, closed-door and linear. To become capable of changemaking in practice, we need a rethink of partnerships between the public and the private sectors to become more collaborative, creative, adaptable, accountable and place-based. Drawing on NLGN’s Changemaking Vision, this approach calls for a radical change in culture and relationships between the public and private sector. We first reflect on the challenges currently facing partnerships before setting out this new vision for partnership working between the public and private sector.