Partnership or procurement: a roundtable on collaboration across sectors

Holyrood roundtable in association with Carillion - Image credit: Mark K Jackson/Holyrood

“I know that some in the public sector are always a little bit reticent about private sector involvement. I think times are changing and we’re seeing more folk see private sector involvement as an opportunity rather than a threat, as it often was felt in the past,” said Kevin Stewart, Scottish Government Minister for Local Government and Housing, in his opening remarks at the Holyrood and Carillion roundtable on public-private partnership.

Entitled ‘Partnership or Procurement’, the event brought together senior figures from across local and national government and other public bodies to look at how the public and private sectors can best collaborate to deliver public services and overcome the obstacles to a positive working relationship.

Having travelled around Scotland this summer and visited a number of community planning partnerships, Stewart has been looking into different examples of good practice. “It’s quite clear to me that private sector involvement is greater in some areas than in others,” he said.

He mentioned two positive examples: a shared apprenticeship scheme in Angus, which helps SMEs who are not confident in taking on an apprentice themselves, and an economic development forum, Opportunity North East.

Another case shared by both Stewart and Scott Bell, Head of Procurement Reform at the Scottish Government, and one that has been much discussed recently, was of Comhairle nan Eilean Siar’s recent transport procurement exercise, where the public was given decision-making power over the entire budget and allowed to shape the contract for public transport provision in the Uists and Barra.

“People know what they want, and as the public or private sector, we should not be afraid to listen and we should not be afraid to let them shape it,” said Stewart. “There were parameters, there always are, but folk understood that there were parameters. Some folk thought that there was a risk in allowing folk to shape contracts, but they had the help and advice behind them.

“But all of this leads to good news all round, for the council, for the public, for the contractors…all of this, I think, needs to be replicated all across Scotland. And that’s maybe a challenge to some folks who are procuring that it really shouldn’t be. It just means changing the job a little bit.”

Colin Proctor of Scottish Futures Trust described two types of partnership, some that are “quite transactional”, centred around procuring things, and others which are more service based and relate more to managing change within public services. These are probably fewer, he said, but it’s an area that needs to be explored more fully.

He also highlighted the willingness to take that risk as being a consideration. “I do know there is a desire to be more creative and innovative and take more risks and that’s something that we find even in the work that we’re doing,” he said.

Claire Mack of SCDI said there needed to be more clarity for businesses about what was required. “For us at the moment, we’re now looking to business not only to help partner with the public sector on delivery, but we’re also looking to them to deliver economic growth, and against the backdrop of sustainable growth and inclusive growth as well, and there’s a need for clarity about what those points mean, I think, from a business point of view.”

The purposes of business and the public sector won’t always align, she added. Businesses will look for a rate of return, and their view of economic growth is probably different to sustainable and inclusive growth, but that doesn’t mean they don’t want to help deliver it.

She called for more platforms for business and the public sector to speak “openly and in an open-eyed way” about what could be expected from the private sector, because with it being more subject to the business cycle than the public sector, if they’re tasked with delivering something additional, it increases the risk.

Housing was an area that was highlighted as being a success story so far in terms of cross-sector collaboration with little opposition, and Craig Sanderson of Link Housing Group noted that since the recession they had forged new, more positive relationships with both the private companies and local authorities as others had struggled to continue house building.

According to Joyce White, chief executive of West Dunbartonshire Council, one of the biggest challenges is making sure that the two sectors understand each other well, know each other, and understand their differences.

They have different priorities, “but I think we’ve got some very constructive partnerships, and we maybe need to celebrate the success of those a wee bit.”

A willingness to work together was another area that she highlighted. “The other thing for me is that it’s really important that it’s a willing partnership and that you come to the table in the way that you have again from an integrated joint board in health and social care partnerships. If you want to do it, you’ll make it happen. If you’re forced into it, then I think it’s a much greater challenge.”

Russell Frith of Audit Scotland echoed this. “Clear and mutually understood expectations, I think, is absolutely essential. And those expectations are for the period of the partnership or the relationship, not just the first few weeks or months, because particularly when you get into services rather than physical assets, where things don’t work, it’s because of the scope or the willingness to be flexible to change things.

“The world doesn’t stand still, so trying to prescribe everything in a detailed contract and then calling it a partnership tends eventually to unravel. So it’s that clarity of expectation, willingness to enter into it mutually that helps.”

However, Frith highlighted that the willingness to work together does not always run right through an organisation, and that can cause some issues.

“I think we see quite a lot of examples of good cooperation, good service delivery at working level, and we also hear it at the top, but it’s not always clear that it’s all the way through the organisations. It’s actually potentially in the middle where some of the almost invisible barriers and obstacles to getting things to work [exist],” he said.

One solution to this, Bell suggested, was to start much earlier in the conversation, “helping officials to articulate what they want it to be, how do we actually take the political will behind an idea and then create that into something that can move forward” and to have the conversations at all levels with both senior and junior staff.

The role of the personalities of staff involved in driving forward the collaboration was agreed to be key, in that it was vital to have the right person in place to manage the relationship and the right people involved in drawing up the contract. Bell highlighted the issue that for some in the public sector, the tendency is to start from the point of view of the tender process regulation, but that’s not the right place to start.

“I think starting with the position of constraint is probably the comfort position for a number of public bodies. There’s nothing in our procurement guidance that suggests that’s what you should do. It’s opening that up, having the broad conversation, recognising that you do have to go into a regulated space at some point.

“There’s scope and that’s a great example for that scope. The personality type, the type of person who can do that, I think, is something that we need to harness and develop. At times we may need to look across the board, beyond the traditional procurement department. Who are the people who can lead those conversations?”

Chair George Black mentioned the Commonwealth Games as an example where contracts were drawn up by one group of people, while others were left to manage them afterwards.

Frith said: “I would probably say, in an ideal world, the people who are going to be managing the contract should be participating in the design of it in the first place, because apart from anything else, that’ll give them a sense of ownership of it.”

The question of the different weightings given to price versus quality in contracts was also discussed, with falling council budgets leading to price becoming more of a concern, but for procurement of services, the quality was essential.

Sanderson explained that in most contracts he had been involved in in the past, the balance had been 70 per cent quality and 30 per cent price, but now some were 60/40 or even 50/50. Shona Dunsmore of Carillion said they would have to give serious consideration to being involved in a contract where the emphasis is mainly on price.

Black asked Frith where he would stand on this from an audit point of view, where would they expect the balance to lie between quality and price? This would depend on the circumstances, Frith said, noting that they had recently completed a £25m tender for auditors where the balance was 80 per cent quality to 20 per cent price, because quality was what was important in that case.

Stewart posted the question to the room of how to improve at sharing best practice. For Anne Toms of Carillion, the question is one of changing to regulation to better reflect positive contributions rather than just prohibitions, while for Sanderson, it is taking into account the environmental and social benefits of housing developments rather than just rent levels in measuring success.

“It is difficult to see why it hasn’t been cracked in a country like Scotland where actually, the communication tools are there and we’ve generally a very good willingness to work together, as evidenced by what has been happening with city deals and regional growth deals,” said Mack.

However, Frith noted that Audit Scotland had found it was helpful to simply get all the relevant people working in similar roles from the different organisations in the room together, and sometimes that had never happened before, even though there’s only 14 health boards and 32 councils.

“The heads of, or the managers delivering particular services, have never actually met their opposite numbers, and even doing that, getting them in the same room and talking, is quite helpful in starting to get them to see that maybe other things people are doing could work for us. Telling them it could work for them just doesn’t work, it tends to bring barriers up,” said Frith.

There was agreement that partnerships are not the only route and it depends on what is being procured as to what the type of relationship should be.

Summarising how and where a partnership model could work, Bell said: “Should we have a partnership model run for relatively commoditised goods and services? No. We should probably be going to the market based on the competitive  frequency of that market…so that’s what we do there.

“Are there other things that we all buy together? Yes. Then we should collaborate on that and use the likes of Scotland Excel.

“Are there strategic services that are going to actually be the embodiment of your public service in the eyes of the citizens you serve? Yes. We should perhaps be thinking about a partnership model coming to bear in those. That’s where it matters. That’s where your personality is in front of the citizen. And that is more likely to be, I would have thought, enhanced through a robust partnership model rather than a contract.

“But partnership doesn’t mean we get along all the time or we agree all the time, it means we can have the really tough discussions. We can expose our weaknesses. We can get into what it really means to move forward. I don’t think procurement needs to change that much. However, I do think our behaviours and our leadership does.”