Partnership

There are real partnerships and false partnerships in the public sector.

Real partnerships include commitments from management/government and a trade union to work together in making an enterprise/agency/workplace deliver effective quality services that use public money wisely, deliver good services to the users and provide good working conditions for the workers concerned. They include the kinds of agreements found in the UNISON-NHS Agenda For Change Final Agreement and the Partnership for Quality Agreement between the New Zealand Government and the NZPSA.

Another positive partnership is the concept of Public-Public Partnership (PUP). Here, a successful public agency in one country/region/service helps a struggling agency in another country/region/service to improve its management, budgeting, planning, personnel development, service quality, etc. This is not a ‘take-over’ but a genuine collegial effort to spread good practice ideas. Such schemes have operated between water utilities in Sweden and the Baltic nations and such utilities in Brazil and South Africa.

However, the kind of ‘partnerships’ promoted by the international financial institutions, the OECD or other neo-liberal bodies are the very opposite of partnership. Very often, they are roundabout ways of shifting expenditure off of the current government’s books – making it look good – but leaving future governments and generations with long-term higher costs.

Public-Private Partnerships (PPPs), are cases where a public operation receives what appears to be private funding, perhaps from a multinational company, in circumstances where the private operator takes over the running of the public operation, either totally (employing the staff as well) or by providing the new management. The money may ‘appear’ to come from the private sector but it is most often money on loan from the World Bank or a donor government (themselves public institutions) and will have to be paid back by the operation. The lending rate is often higher than if the government body had borrowed at public concessionary rates and the costs are often higher because the private operator rakes off either high administration fees or puts in very highly paid executives. Very useful critiques of PPPs can be found in many of the reports produced for PSI by the PSIRU.

A related concept is a Private Finance Initiative (PFI). These differ from PPPs in that the private operator actually builds (or buys) the facility – such as a school, prison or hospital - and runs it for the government. The contract price includes the daily operating costs plus the repayment of capital and interest. Many contracts run for 30 years. In some PFIs, at the end of the contract, the facility reverts to the government to run as it sees fit; in others, the company keeps it and tries to use it for some other purpose. Again, the PSIRU has many case studies showing that not only are the costs higher, as with PPPs, but that the annual cost of the contract is such that either the government has to cut services in its own facilities (closing wards/classrooms, making prisons even more overcrowded, etc.) or the contractor reduces the level of the contracted service. In the UK, there are many examples of the contract therefore being canceled and the public authority then discovering that it does not ‘own’ the facility and patients, pupils or prisoners are left with no/poor services.