The collapse of a proposed deal between Kent County Council and
Hyder Business Services (HBS) has underlined the difficulty of
implementing public private partnerships (PPPs), according to
industry experts.
Robert Morgan, chief executive of outsourcing consultancy Morgan
Chambers, said, "This highlights the difficulty of PPPs because, by
definition, there is a conflict of interest between the commercial
drivers of the outsourcer and the social conscience of the
council."
Last month Kent County Council and HBS issued a joint statement
agreeing not to proceed with the proposed partnership, which
involved a range of services provided by the council. Service areas
including IT, finance and personnel will remain in-house while the
council reviews future options.
HBS chief executive John Jasper said, "We could not reach an agreed
arrangement which reflected the right balance of risk and reward,
which is very disappointing for both of us."
The announcement followed a 10-month procurement process. Council
leader Sandy Bruce-Lockhart said, "We have completed a challenging
and intensive assessment period and it's disappointing we could not
agree a final contract."
Experts have warned that the breakdown of the deal emphasises the
importance of good preparation and flexibility in PPP contracts.
Morgan said, "Everything is down to preparation and a clear
understanding that the risk-reward balance can only be achieved by
re-engineering parts of the service."
There has to be an appetite to realign business objectives and
services to support them on an annual basis, he said.
There is growing concern in the public sector about the impact of
PPPs. Newcastle City Council recently obtained a High Court
injunction to prevent a strike by public sector staff opposed to
the council's plans to introduce PPP to IT services.
james.rogers@rbi.co.uk