Local authorities can use joint ventures (JVs) to deliver services effectively, but only if objectives and partnership arrangements are carefully consider, report says.
A new study by Grant Thornton UK LLP found JVs — traditionally partnerships between councils and commercial organisations — could be a successful means of delivering front-line services, despite some high-profile failures.
The report, entitled Better Together: Building a successful joint venture company, argued the success of JVs depends on certain conditions being in place.
There must be clear objectives; a culture of trust; freedom for the JV to work independently; and appropriate corporate structure and governance arrangements.
Grant Thornton also discovered public-public joint ventures can be particularly effective because councils have common cultures already in place and good collaborative relationships.
There is also less tension for councils as partners in profit-making public-public JVs because all profits are returned to the public purse.
Vivien Holland, local government advisory at Grant Thornton, said: ‘Overall, joint ventures can be a viable alternative delivery model for local authorities. Our research indicates that the numbers of joint ventures will continue to rise, and in particular we expect to see others follow examples of successful public-public partnerships.’
Ms Holland continued: ‘Joint ventures offer great opportunities for savings and income generation, and mean councils can bring in outside expertise rather than operating alone.
‘If procured with enough innovation, creativity and collaboration in mind, they may also be capable of delivering more than just profit, such as wider community benefits. This will be important as more councils seek to identify social as well as financial returns.’