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ANALYSIS - ODPM TO TACKLE PARTNERSHIP RISK

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The ODPM?s Strategic Partnering Taskforce is about to publish guidance on strategic partnerships, amid concerns tha...
The ODPM?s Strategic Partnering Taskforce is about to publish guidance on strategic partnerships, amid concerns that bundling services into single arrangements puts those services at risk.

The government has been promoting public/private partnerships for some time, and the ODPM taskforce was set up just under two years ago to look at large-scale, long-term partnerships worth tens of millions of pounds.

It is about to publish guidance based on an extensive research programme, focusing on 24 large-scale projects.

Through its research, the ODPM?s taskforce hopes to provide councils with useful information on where to find advisers, pricing and contractual details and what new deals are being considered.

This guidance should go some way to putting council senior managers? minds at rest following concerns that grouping services under loosely defined partnership arrangements leaves councils facing risks they have never experienced before.

One council finance director said: ?A good deal is invested in these arrangements, which are often based on trust rather than strict contractual agreements? (LGC, 27 June).

Local government finance consultant Rita Hale said: ?I find the concept of contracts for 20 or 30 years quite frightening because they cannot change along with demographic change, and strategic partnerships do not say who will be responsible for what. It is rather disturbing that it is not clear who is responsible for what and for how long.?

Ms Hale added: ?Councils are expected to set up these partnerships with a whole range of bodies, but local authorities have to put in most of the management time. It is a distraction from delivering services.?

The consensus seems to be that councils are investing so much time and effort in setting up strategic partnerships that service delivery is suffering. This could have a knock-on effect since if the council loses

its grip the contract could fail ? and it is local government that is left to pick up the pieces.

Pam Duke, principal con sultant for insurers Zurich Municipal Management Services, told a recent Association of Local Authority Risk Managers conference: ?Plotted over time, all partnerships are characterised by a falling ability of the local authority to exert influence as the partnership takes on a life of its own, and an increasing potential impact if a risk does emerge.?

She says careful planning at the early stages is vital because addressing fundamental risks late on ?can be like trying to turn around a super tanker.?

This is undoubtedly good advice. Of course, it seems likely all councils setting up large-scale partnerships will have already taken this into account ? there are none that have stated their express aim is to ignore planning at the early stages. However, there are still partnerships that sink.

Large-scale deals, such as that between Agilysis and nine councils in north Yorkshire, and between Liverpool City Council and BT, are now less popular and smaller partnerships are finding favour.

Councils are right to be wary about setting up strategic partnerships but they remain a key part of the government?s strategy to reform public sevices.

Prime minister Tony Blair reiterated his commitment to strategic partnerships

in a recent speech to the Fabian Society, when he suggested the structure of

the public sector would soon be unrecognisable compared to what existed when Labour seized power from the Conservatives.

The prime minister insists there must be as much choice in the public sector as there is in the commercial sector, adding: ?Our aim is to open up the system, to end the one-size-fits-all model of public service.?

These comments echo those in a recent speech by Capita executive chairman Rod Aldridge to the Chartered Institute of Public Finance and Accountancy?s annual conference, in which he said public services are not changing fast enough.

These comments led to a number of shock and awe headlines, which must have surprised Mr Aldridge since he has been putting across this message for some time.

In an interview with the Financial Times a year ago, Mr Aldridge said: ?It has become clear that many public sector bodies lack the capacity to be effective procurers and to effectively client manage public/private partnerships.?

Mr Aldridge clearly has the ear of the prime minister, but the leadership of both Capita?s executive chairman and Mr Blair will not be around for the lifetime of strategic partnerships. Councils setting up large-scale partnerships could be risking a great deal by pursuing the government?s initiative too enthusiastically and it will be interesting to see how the ODPM?s taskforce suggests overcoming the problems inherent in strategic partnerships.

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