PLC Public Sector reports:
With budgetary pressures increasing exponentially and private finance seemingly drying up, the public sector needs to find increasingly innovative ways of working with the private sector to deliver high quality services to the public, obtain value for money and, in an ideal world, create additional revenues for themselves.
One obstacle to such creative working has been the apparent conflict between the inherent risks in innovation and the underlying conservatism in public sector decision-making processes. This tension was not eased by HM Treasury’s December 2001 guidance on public:private joint ventures, which had a restricted remit, focusing solely on the creation of corporate joint ventures for creating value under the Wider Markets Initiative. This limitation has recently been recognised by the Treasury, which in October 2009 published revised draft guidance on public:private joint ventures for consultation, which takes a wider look at the potential for joint ventures across the whole procurement spectrum.
The revised HM Treasury guidance aims to provide a framework for public authorities to follow when creating a joint venture. It addresses issues arising across the entire procurement cycle, starting with help in determining whether a joint venture is the best delivery model, before moving on to the key issues that need to be addressed during procurement and the negotiation of a joint venture arrangement. It includes specific advice on:
- When a corporate joint venture may be appropriate.
- Joint venture structures.
- Structuring the joint venture equity.
- Selection of the private sector partner.
- Managing public sector interest in the joint venture.
- State aids.
- IP rights.
- Staff issues.
- Exit strategies.
The consultation on this draft guidance closed at the end of January 2010 and we have been promised final guidance before the pre-election budget. PLC Public Sector will provide full details of the final guidance once it is published.
In the meantime, any public authority considering its options for future service delivery should consider the advice set out in the draft guidance. Any authority seriously thinking that a joint venture with a private sector partner might be part of their solution, should consider attending the forthcoming Local Partnerships conference on local authority joint ventures. The conference intends to provide answers to questions such as:
- How can sustainable partnerships be created through joint ventures?
- How can local public bodies collaborate with other sectors and bodies to deliver joint objectives?
- How can local public bodies share services with each other and deliver efficiencies?
- What powers do local public bodies have to collaborate?
- What current examples are there of successful delivery through joint ventures?
The conference takes place on 3 March 2010 and further details can be found on the Local Partnerships website.