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MENTOR - DON'T BE A DONKEY-GO THE WHOLE HOG

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Councils often shy away from partnerships through fear of being made to look an ass. But the tide is turning, says ...
Councils often shy away from partnerships through fear of being made to look an ass. But the tide is turning, says Rebecca Coombes

When considering a partnership, there is an Eeyore-like tendency in local government to look at the negatives.

Many councils have barely started to explore the partnership options open to them. They are scared away by high-profile problems experienced by the Criminal Records Bureau and London Underground public/private partnership, fear of commitment or simply by time and resource constraints.

Yet the tide is slowly turning. New Ways to Modernise, a report from the New Local Government Network, reviews 24 partnerships in local government and concludes that the partnership route is the best way to excel at local service delivery.

The first step is to get the right type of partnership to suit your needs. The network finds that many partnerships falter because the council has not done its homework in the first place. Although a wide variety of partnership vehicles exist - joint ventures, non-profit distributing organisations, partnering contracts - many are making semi-informed decisions that don't ultimately suit them.

Partnerships with other councils - totally under-explored, says the report - and public bodies such as health and the voluntary sector can provide real benefit.

But a frequent whinge of the private sector is the lack of procurement expertise in the public sector. Efficiency review head Sir Peter Gershon said in 2003: 'For partnerships to succeed, we need sufficient capacity on both sides of the table. This applies to negotiation, the set-up of partnership and the operation and management once it is up and running.'

The good news is that private sector firms have reported they are dealing with increasingly intelligent council clients who know what they want and how the partnership can help them achieve their objectives.

David Sheridan, managing director of the Kier Sheffield LLP, a partnership between construction firm Kier and Sheffield City Council to deliver building repairs, says: 'It was clear from the start that Sheffield knew what it wanted and that it was determined to get it. Its management of the procurement was strong and it laid out its objectives very clearly.'

Clarity of purpose is a principle strongly held by David McElhinney, chief executive at Liverpool Direct Ltd, one of the most radical partnerships in the country.

The four-year-old joint venture between BT and Liverpool City Council delivers the council's customer contact centre, HR and payroll functions. From the first day, the company was answering 30% more calls than the old switchboard, and about 50,000 calls are received every week. The partnership, worth£300m over 10 years, had a clear vision from the start.

'The city was very clear what it wanted from the outset,' says Mr McElhinney. 'Councils can be seduced by the idea of a partnership without putting much thought into what they want to achieve in the long term.

'Each partner has a stake in the outcome. The city council owns 20% of Liverpool Direct and any profit is shared on a case-by-case basis, rather than an 80-20 split, so there is an economic advantage to both parties.'

Another golden rule is to choose your partner wisely. 'It wasn't purely on cost - the city was careful that we shared the same values,' says Mr McElhinney. 'We have a local government ethos, even though we wanted to benefit from the best of the private sector. BT was a good fit for Liverpool. Once you have the right partner, you have to work hard in the first one to two years to build a culture so you can cope when things get tough.'

Mr McElhinney says at this point you should have the confidence to go the whole hog. He dismisses many local government partnerships as 'little more than outsourcing'. At Liverpool Direct, every employee is seconded from either BT or the council. The chief executive is seconded from the council, the only BT subsidiary to be managed by a non-BT employee.

'What's great is that the partnership is not just two organisations, but the employees are part of it,' he says. 'There was a certain amount of bumping together in the first 12 to 18 months but now if you walked into Liverpool Direct you wouldn't be able to identify who has been seconded from BT and who from the council. We played down the branding internally so that on day one it wasn't new business, new uniform. We didn't want to create a third entity.'

There will be bad times, says Mr McElhinney, but the trick is to be prepared. 'Every partnership works when things are going well,' he says. 'The test is when they aren't.'

>> New Ways to Modernise is available from York Publishing Services, priced£26.25. Telephone 01904 431 213.

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