Recourse and clarity the keys to partnerships

According to The Australian Financial Review, community support for public-private partnerships depends on transparency and accountability.  (Editorial, p54, February 18).  This raises the true challenge for state and federal governments:  to develop appropriate measures against which performance under the contract can be assessed.

Performance measurement is an area in which governments had no experience, and needed none, until relatively recently.  Many of the problems that have arisen where services have been contracted out are because of the inability of governments to adequately manage their contracts.

Take education as an example of what could be achieved under a properly designed contract regime.  For over a century, since the introduction of legislation to enforce compulsory schooling, governments have assumed that to ensure that every child receives an education, government has to provide that education.  But it doesn't have to be that way.  Whether a child attends a government or private school is irrelevant to the state fulfilling its responsibility of compulsory education.

Private companies could receive payments according to specified criteria such as attendance levels, test scores, and employment rates after the students have left school.

The performance of schools does affect student achievement, just like the management of hospitals effects patients.  A broader conception of contracting out government services in addition to improving the quality of service would also force governments, and in turn the community itself, to ask exactly what is expected of government services.

Contrary to what critics claim, this could herald a new era of transparency, because for the first time the public would be told what it could expect from government and from private providers.

If we are to gain the full potential from the emergence of more public/ private partnerships, both governments and the private sector must deal with some threshold issues.

As a matter of principle both parties must accept that unless there are extraordinary circumstances all contracts should be public.

Part of the reluctance of the community to accept public/ private partnerships is due to secrecy provisions in contracts.

Private operators must come to appreciate that at least initially they will be subject to far greater scrutiny than applied to government undertaking the same activity.

Companies in partnership with governments will learn that their obligations will extend not just to the other contract party but also to the clients of the service and the community more generally.

Governments and public servants must also understand that accountability does not end when a signature is placed at the bottom of the page.  Regardless of whether a service is contracted out or not, the community will expect a right to ultimate recourse.  We have already seen this expressed with the resignation of the responsible ministers in various jurisdictions throughout Australia.

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