Rhian Edwards and Sarah Owens, Wales Co-op Centre, at Engage - the collaborative working conference 2013.

1. Partnership working for
public service delivery
July 2013
Professor Tony Bovaird
INLOGOV and Third Sector Research Centre

2. Introduction
 “Partnership is just a way of transferring my work to the
private sector, where it will be done for lower pay and
worse conditions of service”
 “We have found that when the public sector proposes a
‘partnership’, what they generally mean is that they want
to transfer the responsibility for a particularly difficult
service or issue to us, and give us a lower budget to deal
with it than they were previously spending themselves”
 We think that we have shown the public sector how to do
their work faster, better and cheaper … and that there are
lots of other areas where we could do the same”

3. Informal economy outputs
Informal social value-adding
outputs
Value-adding
outputs in
market, public
and third sectors
and in civil
society – how
big are these
different circles?
What’s
going
on ‘out
there’?
Formal volunteering
Private and
third sector
market
outputs
Public sector
outputs
Informal social value-adding outputs

4. A new model of Value for
Money in local governance?

5. But … some doubts
• Is there real commitment or just ‘partnership
claiming’ to show willing and to qualify for funding?
• Are these partnerships between equals … or just new
clothes over old relationships?
• Will these partnerships make a real difference to
service quality or costs?
• Are they just a ploy to disguise lack of new
resources?

6. Why partnerships are so liked … some
potential benefits
 Services designed for users, not for providers
 Better co-ordination of activity, less confusion for all
 More meaningful focus of participation from all
stakeholders - users, staff, politicians, others
 Synergy from working together
– greater efficiency in resource usage
– more specialist resources affordable
– faster communication
 Greater user satisfaction, better public image, greater staff
satisfaction

7. … and so hated
 Fragmentation of structures and processes, which
makes co-ordination more difficult
 Blurring of responsibilities and of accountability,
especially where the partnership is reluctant to share
information on its activities (‘commercial confidentiality’)
 Fear by staff of losing their jobs
 Fear by politicians of losing control over policy making
 Fear by service users and citizens who do not wish to
become objects of a profit-making calculus

8. Purposes of partnership
 Improving the co-ordination and integration of service
delivery among providers
 Developing new and innovative approaches to service
provision (by bringing together the contributions and
expertise of partners)
 Increasing the financial resources (e.g. by diversifying
funding streams or achieving cheaper procurement)
available for local services
 Sharing risk (and therefore reducing organisational
vulnerability)
 Adapted from Geddes (1999)

9. Partnerships Continuum
AUTONOMY
PARTNERSHIPS
CONTRACTS
ALLIANCES
JOINT VENTURES
GROUP STRUCTURES
MERGERS/AMALGAMATIONS
INTEGRATED UNITARY
ORGANISATIONS
DEPENDENCE
Independence decreases
Integration increases
Transaction Costs increase,
Scale Economies decrease

10. Partnership – many shapes and sizes
 Public-Public Partnerships
– Local Service Boards
 Public-Private Partnerships (PPP,PFI)
– infrastructure (e.g. London Underground, M6 toll road, facilities maintenance)
– public services (ICT services, contact centres, prisons)
– joint venture companies (e.g. Service Birmingham)
 Public-Third Sector Partnerships
– public services (e.g. community care)
– community services/activities (e.g. community management of leisure
centres/libraries)
– public–business-third sector partnerships (e.g. Work Programme)
 Co-production
– partnerships between users and commissioners (co-design of day centre activities)
– partnerships between users and providers (e.g. expert patients)
– users involved in commissioning and procuring (e.g. young people’s discretionary
services)
– co-payments (e.g. fundraising for school equipment)

11. Evaluation framework for comparing
organisational forms (partnership v. merger)
 Synergy, economies of scale and economies of scope
 Collaborative working through relational contracts
 Collaborative working as ‘joined-up services’
 Collaborative working as ‘resource sharing’
 Collaborative working as ‘risk-sharing’
 Assessing the benefits of collaborative strategy

12. Strategic management rationale for
partnerships
 Economies of scale in provision
 Economies of scope in provision
 Opportunities for mutual learning between partners
 LEADS TO ARGUMENT THAT ONLY WHEN ALL PARTNERS
HAVE EXPERTISE IN ACHIEVING ‘COLLABORATIVE
ADVANTAGE’ CAN THE PARTNERSHIP ITSELF ACHIEVE
‘COMPETITIVE ADVANTAGE’ RELATIVE TO OTHER POTENTIAL
SUPPLIERS

13. Economies of differentiation and
specialisation
 Economies of scale
– the bigger the volume of output, the lower
the unit cost of provision
 Economies of task learning
– the more detailed the task, the easier it is
to learn how do it better and to innovate

14. Economies of scale
 Indivisibilities – e.g. machinery
 Mechanisation and automation
 Division of labour – making use of natural aptitudes
 Increased precision, reliability
 Cheaper procurement of inputs
 Efficient use of materials (less waste)
 Cheaper or readier access to finance
But …
 More vulnerable to instability in demand (‘putting all eggs
in one basket’)

15. Conventional wisdom as driver of mergers
 The culture around the Gershon efficiency savings has driven
created a national policy perspective that believed that ‘bigger is
better’, without really examining ‘what is better bigger’.
 While this perspective may often be appropriate for finance and
payroll services, it probably doesn’t make sense for personal
services like teenage pregnancy services.
 Again, there is evidence that public services could be used better
to develop local economies, e.g. through their role as employers –
and TSOs can help (though larger TSOs may be less locally-
based).
 However, more generally, there is some evidence that large
organizations create bureaucracy that reduces flexibility,
innovation and responsiveness.

16. So what does ‘scale’ now mean?
 Economies of scale: where an increase in
inputs brings a larger increase in returns ...
(e.g. handling all customer contacts in one
system?)
 ... but an increase in WHICH inputs?
 Up to now, there has been major attention
to inputs made by or paid for by public
agencies
 This is misleading in terms of the ratio of
outcomes to costs in the community ...
(e.g. the extra time taken by housing
clients to get their repairs done through a
multi-purpose joint venture call centre)
 ... but we would need to measure user
and community inputs in the future if we
wanted to take account of this
 Warning: many empirical studies suggest
constant returns to scale, others also find
diseconomies of scale

17. Economies of scope
 Making more use of the range of abilities of the staff and
the organisation
 Allows ‘hidden’ or underused skills and abilities to be put
to use by the organisation(s)
 Also allows staff to engage in multi-tasking, making
better use of their time
 A key element of most professional training and
experience, which equips professionals to undertake a
wide range of tasks

18. Importance of ‘economies of scope’ and
‘economies of learning’
 Only in 1980s did importance of economies of
scope become widely appreciated – savings
which occur when the RANGE of activities
undertaken by an organisation (or partnership)
increases (because they have joint costs) – e.g.
where the ‘meals on wheels’ staff check and
report back on wellbeing of meals recipients
 ... and importance of economies of learning –
where savings occur over time as staff AND
users learn how to co-produce the service better
– e.g. getting inquirers to have details with them
when they call the call centre, getting ‘meals on
wheels’ deliverers to respect agreed time of
delivery and users to wash yesterday’s reusable
tray and dishes
– means we should avoid disruption - ‘churn’, ‘initiativitis’

19. Economies of scope through personal
relationships
 Personal relationships are often more important than systems in
delivering outcomes for users (recognised by Beecham and Christie
reports in Wales and Scotland)
 Economies of scope are often available in relationship-oriented activities
(exploiting the existence of customer knowledge, team working,
partnership commitment)
 These are too often undervalued by the one-dimensional commissioning
frameworks
 So providers with strong local and customer-based relationships can
cheaply provide wider range of services than less trusted providers
 Economies of Scope may exceed Economies of Scale

20. Co-production in practice: the Four Co’s

21. Our definition of co-production
“Co-production of public services means
professionals and citizens making better
use of each other's assets, resources
and contributions to achieve better
outcomes and improved efficiency”.
SERVICE USERS AND COMMUNITIES know
things that many professionals don’t know ...
... and can make a service more effective by
going along with its requirements.
... and can change their behaviour to prevent or
defer need for future services.
... and have time and energy that they
are willing to put into helping others.
““It takes ‘two’ –It takes ‘two’ –
professionals andprofessionals and
communities.”communities.”
““It takes ‘two’ –It takes ‘two’ –
professionals andprofessionals and
communities.”communities.”

22. Different types of co-production
 Co-governance of area, service system or service agencies –
e.g. neighbourhood forums, LEPs, HWBs, school governors
 Co-commissioning services – e.g. personal budgets,
participatory budges, devolved grant systems
 Co-planning of policy – e.g. deliberative participation, Planning
for Real, Open Space
 Co-design of services – e.g. user consultation, user-designed
websites, Innovation Labs
 Co-financing services – fundraising, charges, agreement to tax
increases, BIDs
 Co-managing services – leisure centre trusts, community
management of public assets
 Co-delivery of services – peer support groups, expert patients,
Neighbourhood Watch
 Co-monitoring and co-evaluation of services –user on-line
ratings, tenant inspectors

23. Why ‘user and community co-production’?
 We now realise that service users and their communities know things that many
professionals don’t know … (‘users as thinking people, communities as
knowledge bases’)
– E.g. co-design of services, co-authors of user manuals
 ... and can make a service more effective by the extent to which they go along
with its requirements (‘users and communities as critical success factors’)
– E.g. self-medication, self-management of long-term conditions
 ... and have time and energy that they are willing to put into helping themselves
and others (‘users and communities as resource-banks and asset-holders’)
– E.g. peer support (Knapp et al, 2010); expert patients programme
 TSOs are a key mediator of these relationships

24. Implications of economies of scope
 Activities which gain from being done
together SHOULD BE done together – either
in a single multi-purpose organisation or in a
‘seamless service’ in a partnership
 Transactions costs of SEPARATING activities
which naturally have ‘joint outputs’ may
override economies of scale – e.g. joint
needs assessment rather than single needs
asssessment
 Smaller but holistic may be better than large
but disjointed

25. Evaluation framework for comparing
organisational forms (partnership v. merger)
 Synergy, economies of scale and economies of scope
 Collaborative working through relational contracts
 Collaborative working as ‘joined-up services’
 Collaborative working as ‘resource sharing’
 Collaborative working as ‘risk-sharing’
 Assessing the benefits of collaborative strategy

26. RELATIONAL CONTRACTING
 Recognition that spot purchasing is wasteful and
uneconomic
 Recognition that in-house can be unimaginative and
expensive
 Possibility of negotiated tenders, profit-sharing, and flexible
contracts
 The specification as the ‘worst permissible outcome’ – the
agreement is that partners will work together to ensure that
the service becomes better, quicker and cheaper than the
specification every year

27. Some difficulties in partnership
working
 Cultural - professional, managerial, community-based
 Time consuming to initiate and get going
 Time consuming to maintain
 Potentially bureaucratic and slow
 Unclear accountabilities
 Lack of trust - based on ‘history’ (real and imagined)
 Need for compromise - loss of ‘sovereignty’
 Lack of commitment by some members
 ‘Contract fixation’
 Attempts to steal the credit and dump the blame (e.g.
through separate, self-centred evaluation of own
organisation’s contribution)

28. ‘Good governance’ within partnerships
 Accountability
 Citizen engagement
 Transparency
 Leadership
 Equalities and social inclusion
 Ethical and honest behaviour
 Equity (fair procedures and due process)
 Willingness and ability to co-operate
 Ability to compete
 Sustainability

29. Issues for partnership governance
 ‘The ends do not justify the means’ – observing good
governance principles is also important, not just
achieving outcomes
 However, it may not easily be possible for all these
‘good governance’ criteria to be met simultaneously –
partnerships may have to prioritise them
 In particular contexts, some of these criteria may be
given higher weight than in others

30. 1 2 3 4 5
Quality of Life Issues
Liveable
Environment:
quality of housing
Carrick
Housing Staff
 Board
members
 Voluntary
groups
 Carrick
District
officers
 Public
officials
Liveable
Environment:
quality of housing
services
Carrick
Housing Staff
 Board
members
 Voluntary
groups
 Carrick
District
officers
 Public
officials

Liveable
Environment:
quality of
surroundings
Carrick
Housing Staff
 Board
members
 Voluntary
groups
 Carrick
District
officers
 Public
officials

Community safety Young families  Media 
Health, social well-
being and disability
issues
Disab.
Tenants
 Board
members

Education and
Training
Young People  Business 
Governance Principles
Transparency Young families  Board
members
 Media 
Partnership working Carrick
Housing staff
 Board
members
 Public
officials
 Voluntary
groups

Sustainability Carrick District
officers
 Young people 
Honest and fair
behaviour
Disab.
Tenants
 Private
contractors
 Business 
Governance Test: Perception of different groups of current
quality of life and state of public governance
on Carrick Housing estates (Governance International)

31. Future of partnerships?

32. Impacts on organizational efficiency and
service costs?
 Commissioning and procurement procedures are often
inappropriate – if they do not leave enough time in the run
up to the bidding (e.g. in worklessness programme ), then
TSOs can be squeezed out.
 Similarly, payment systems are important – where there is
payment by ‘results’ (outcomes), organizations are
incentivized to focus on easy ‘results’, so commissioners
are incentivized to target on harder ‘results’
 DWP has so far managed to get away with ‘outcome-
based contracts’ but only after a lot of ‘shenanigans’
(mainly renegotiation of contracts in mid-flow), which
implies relational contracts (a surprise?)

33. Impacts and outcomes
 Rare to consult users on outcomes, except through Place Survey
 Impacts of partnerships on services and users: often too early to
say, or not monitored
 Concern about how to measure impact on services, especially in
downturn
 Hard to find evidence for cost savings, especially where it wasn’t
the object of partnership (except in housing mergers?)
 It’s hard to compile evidence about benefits or otherwise of
partnership – because of ‘warm glow’ and attribution issues
 Nevertheless, partnerships strongest where there is external
funding to be pursued AND partners have ownership, AND clear
(shared) purpose AND potential synergy – conversely externally
mandated & steered partnerships the LEAST SUCCESSFUL

34. And in the future?
 Some interviewees are becoming more skeptical, suggesting that the
‘partnership edifice’ is starting to loose its rhetorical power, and with
cutbacks people will go back into their organizational shells.
 Others believe that the future third sector will involve larger providers, with
a long tail of niche providers of services?
 Views are divided as to whether to move to larger providers will come about
by organic growth, by mergers or through looser collaborations and
federations.
 Some interviewees argue that small niche providers will focus more on their
core missions and will recognize that there are some things they can’t do by
themselves, e.g. ‘back office functions’ and property services, which will be
provided as shared service or outsourced. This will help them to achieve
savings but not necessarily sackfront line workers, as budgets are cut.
 These shared services may be achieved through more consortia led by
TSOs.

35. Conclusions
 Partnerships are highly diverse … and not all are value for money
 … but MOST are likely to continue to flourish in public services
 Needs experimentation – current partnerships are not ‘the last word’ - experimentation
needs resilient systems (e.g. ‘last resort intervention plans’, slack resources) – and
resilience needs to harness user and community co-production
 In future, partnerships are likely to have to show ACTUAL CASH SAVINGS as well as
potential quality improvements
 Partners will need to be more comfortable with striving to achieve public goals
 This will require relational contracts, not traditional transactional contracts
 NGOs and third sector organisations may need in the future to play more critical
watchdog roles, to stop partnerships becoming too ‘comfortable’ – or potentially corrupt
 Good news, bad news – partnerships CAN be like this, but many currently are not
 DOUBLE OR QUITS: SAY ‘NO’ TO PARTNERSHIP – except for the ones which work,
which you should invest in

36. Contact
 T.Bovaird@bham.ac.uk