Contracting Risk: Public-Private Partnerships, Service Delivery and Risk Management

Increasingly, statutory bodies contract with the private sector, either for-profit or non-profit, for the provision of public services. While this trend is often driven by financial considerations, risk management marks an... [ view full abstract ]

Increasingly, statutory bodies contract with the private sector, either for-profit or non-profit, for the provision of public services. While this trend is often driven by financial considerations, risk management marks an important aspect in such Public-Private Partnership (PPP) contracting arrangements: ideally, the public sector seeks to insulate itself from actualised risk in the course of service delivery, shifting the responsibility to their private sector contracting partners. The more detailed such contractual agreements, the less scope remains, however, for innovation in public services.

This paper presents empirical data from the UK on how risk management provisions contained in service contracts and/or competitive funding bids, affect the innovation process in public services. Based on qualitative interview data from four case studies across the UK, the paper analyses the nexus between individual perceptions of public service innovation and formal as well as informal risk management practices.

These findings will also be set in an EU context by reflection upon other case data emerging as part of the EU FP7 project “Learning from Innovation in Public Sector Environments” (LIPSE), which allowed the authors to draw on international case studies from Italy, the Netherlands, and Slovakia to complement and contrast the UK findings and identify paths for future research.