An article on False Economy explains why PPP strategic partnerships remain untouched by the government’s procurement reforms. It sets out the four key reasons for the high failure rate of strategic partnerships.
The number of PPP strategic partnerships has increased 35% in just two years with 18 additional contracts valued at £8bn. 60 contracts are currently operating, four were terminated and one completed the contract term, but was not renewed. A further two are being terminated in 2014. Strategic partnerships originated in ICT and corporate services, but have extended into planning, education, police, fire and rescue and property services. The failure rate is very high – nearly 1 in 4 contracts are either terminated, reduce scope as services are brought back in-house, and/or suffer major financial and operational problems. Savings, new business and new jobs targets continue to be illusive.