CONVERGENCE

Growing convergence between the public and private sector and in the large
part, this is based on private sector practises e.g. competition, management
being brought into public organisations. One of the things were seeing from late
90s onwards is the movement of public services, out to private sector, to
different type of movements, so private bodies are becoming part of the network
and systems of public service delivery, ppp in UK is different model of service
delivery which breaks away from the public sector model, in Europe, much
slower model, much more narrowly focused on contracting out, contracting out is
one early form ppp, but in the uk that was introduced in 82/83, was called
compulsory compeititve tendering, so good examples = hospital food, hospital
cleaning, car prking services, i.e. none core businesses,
Rational for PPP, you can combine resources, expertise of private with public,
particularly cash, can share risk, public not takin all liability, if it works and
benefits, more organisations benefits and hence can stimulate economy,
basically a form of creating jobs but not in the private sector, actually in the
public sector.
Lots of other reason, it can improve, in line with NPM thinking, efficiencies,
effectiveness, partiucalry innovative ways of work, innovation and quality is
really important, often contractual models, signing long term deals with private
partners then regulating at arms length, fits in with NPM ethos of arms length
governance and oversight, performance management, regulation. Its a mixed up
model, its using some form of competition, e.g. at the beginning of ppp, if you
want to build a sports centre, you put out a tender, ask private competitors to
compete to build the new centre with the public sector. Then you contract a 20
year deal to do it and manage it, then you collaborate and you do this to provide
the service.
Ppp is a public sector and private sector organisations working together, to
deliver mutual goals, for public = can it deliver the public service/issue/problem,
for private side, can we make money doing it, question for the public is how
much do we want to allow to make profit from providing public services. What is
the appropriate level, is it right that a private firm can make money from a public
service, if that money went back to public sector, could be put towards more
resources or w,e.
Examples of PPP you can think of:
Operate-Maintain
Public partner retains overall ownership of service, but it is provided, by private
partner. Might have some subsidy/grant from public body and the service may
have to fulfil a contractual obligation e.g. we want you to do so many operations,
we want you to teach so many kids, so many levels of openin hours etc.
Operation and maintenance done by private sector
Design- Build
private partner helps design and build new service, or financing the construction,
one of the key things is sharing the risk, then the public sector is given the
building and they have to operate it and management it. But the building and
infrastructure may have been financed, built and designed by a private partner.
Examples: libraries, hospitals,
Benefits of PPP: helps get extra funding, particularly when government dont
want to put up taxes,
Better business and management practises, public service problem= introduced
npm, but quality of management hasnt been brilliant, lack of skills, one way
round that is get people in from private sector to run public services
Circle won the contract to manage hitchingbrooke, private managers coming into
NHS , much more innovative, always trying to do new things, not to accept
established ways of working, own management approach, much more
commercially driven, massive emphasis on quality improvement, lots of positives
from circle ltd, lots of questions, e.g. if theyre making money, whats the
appropriate level of profit they should make from a public service, what forms of
management are there?