25 April 2016 | Herpreet Kaur Grewal
Local authorities increasingly look to joint ventures, but their success relies on shared objectives and good governance, according to a report.
With many local government organisations looking to protect frontline services in the face of significant financial pressure, some are looking to joint ventures (JVs) as a way "to introduce innovation and change".
But a report from Grant Thornton UK LLP warns that as more local authorities adopt JVs in the future, they need to consider carefully the objectives and partnership arrangements of these models to ensure that they can "survive and thrive".
Better Together: Building A Successful Joint Venture Companyis the latest in a series of reports looking at alternative service delivery models in local government.
Although there have been some high-profile failures of JVs, the report found that with the right set of shared objectives, a culture of trust, and the right governance, they can be successful.
The analysis covers JVs delivering a range of council services, both back-office and front line, at different stages in their lifecycle and found that the most common services provided through a JV are: IT; finance; human resources; payroll; road repairs and maintenance; revenues and benefits; schools catering; and property management.
JVs have traditionally seen local government partner with commercial organisations, but the report also found that a new breed of public-public joint ventures could be particularly effective.
In part, this is as a result of combining common cultures, but in many instances, councils already have good collaborative relationships. There is also less tension for councils as a partner in a profit-making public-public JV, as ultimately 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."