Finance Committee calls on Welsh Assembly Government to develop partnerships with the private sector and strengthen public sector skills.  

Wales is facing a major challenge in meeting its future needs for capital investment and it needs to develop partnerships with the private sector.   It must also strengthen its skills in establishing and operating these partnerships according to a report by the Assembly’s Finance Committee published today.   

The Committee found that the private sector is often more successful at completing projects to time and budget than the public sector and that developing partnerships with them will be a key factor in delivering the investment and modern public services that Wales needs.   

However, the report on the first stage of the Committee’s Inquiry into Public Private Partnerships expresses concern about the widespread lack of skills in relation to constructing, negotiating and managing partnerships with the Private Sector.   It has recommended that the Welsh Assembly Government establishes a central body or unit to promote and support partnership projects with the private sector and to take the lead in developing project specifications, negotiating contracts and monitoring and managing performance.   It must also ensure that the needs of staff involved in such partnerships are properly taken into account.

Members also noted that the public sector should be able to manage these projects just as well as the private sector if it had the opportunity to do so and was given the skills.   The Committee calls on the Welsh Assembly Government to develop and strengthen these skills.    

The committee noted a number of good practices in other parts of the United Kingdom, in particular in Northern Ireland and in Scotland, which indicate the kind of opportunity that can be available from partnerships with the private sector and the kind of public service that could be available for the people of Wales,

In Scotland, there has been the development of a ‘concordat’ as a broader, ‘agreed’ framework covering the terms and conditions that apply to both new and transferred staff.   This has provided a clear statement of which staff would transfer to another organisation as part of a partnership project and provide surety about their terms and conditions. A similar concordat in Wales has been recommended.

Chair of the Committee Angela Burns said: “There are some major challenges facing Wales in meeting the requirements for capital investment in infrastructure over the next few years.   There is a pressing need to overhaul our public infrastructure to build and update schools and hospitals and invest in a wide range of other assets.   However, public sector money for investment is very limited.“

“However terms like private finance and Public Private Partnerships create concerns in many people’s minds.  These concerns touch on issues such as whether the public sector gets true value for money and whether risks are correctly transferred.   Therefore the Committee decided to make this the subject of its first inquiry.   We invited evidence about what has worked and what has not worked and the lessons that have been learned.    And we received views from both the public and the private sector - developers, financiers, unions and managers of services in the public sector.

In this first report of the Inquiry, the Committee presents its preliminary conclusions on what is needed if Wales is to draw successfully on the resources and expertise that the private sector has to offer to benefit the public sector.   The Committee intends, in the next phase of the inquiry, to examine some of the alternative and successful approaches that have been developed in building partnerships between the public and private sectors with a view to identifying and recommending models that could be used in appropriate cases.”