1. INTRODUCTION
1.1 Purpose of the research The primary focus of this research project was on the experience and satisfaction of service providers9 working in mature Public Private Partnership (PPP) projects providing social infrastructure and associated services. It investigated whether such PPP projects were operating to meet the service delivery outcomes promised by governments and proponents of the PPP projects, and consequently, delivering the service mix and performance expected by service providers in servicing their client communities.10 The research sought the direct views of service providers on whether the uplift in service benefits to them and their client community, as promised by governments and proponents to be delivered by the PPP model over the traditional model, have been achieved. This research and report seek to contribute to understanding the value for money (VFM) proposition offered by the PPP model in social infrastructure and improve planning for future projects.
1.2 Context of the research The focus of this research was on the experiences of those using the PPP facility and its related contracted services to deliver services to their client community. The focus being on employees (‘service providers’) such as senior executives, managers, administrators, teachers, clinicians, prison wardens, as they service their client community, such as students, patients or prisoners. The research does not sample members of these client communities directly, rather it sought to investigate how the PPP facility and its related contracted services enable and contribute to the performance of service providers in servicing their client community. In some PPP models, the service providers are public sector employees (for example, teachers and clinicians), in other models they are employed through the PPP consortium (for example, prison wardens). From inception, a fundamental characteristic of the PPP model in Australia has been a commercial structure focusing on achieving defined service outcomes through appropriate allocation of risk, KPIs and payment mechanism. Conceptually, in the PPP model the capital asset is the enabler of the service outcomes that are measured and if successfully delivered are rewarded by government or users. The Australian and New Zealand PPP model in social
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infrastructure offer a particularly rich opportunity to assess the service provider experience of the services delivered, especially as PPP projects have been operating in Australia for 25 years. This PPP environment enables a thorough assessment to be undertaken of the service provider’s experience with mature PPPs that are in a “normalised” operational stage. As highlighted in the Authors’ Note, service providers in social infrastructure, compared to economic infrastructure, are typically employed in the long term and on a full-time basis within the PPP facility. Moreover, given their professional interactions with their client community, these service providers are more likely to become committed, and in some cases emotionally attached, to the PPP facility and service provision. The research also investigated user satisfaction with PPP assets compared to traditionally procured facilities. Recently, some social infrastructure portfolio leaders have been critical of PPPs for being too rigid in their contractual outcomes and this may have had an impact on PPP take-up in new projects. This research investigated such concerns with service providers, seeking to identify the source of such issues and what factors can be attributed to positive and poor user experiences.
1.3 Value for money (VFM) The importance of public infrastructure procurement being able to achieve VFM11 remains a critical consideration in business case development and the prioritisation of projects across all jurisdictions. While the money in VFM is associated with the costs of project delivery and operation, value in VFM is associated with measures of benefits including service delivery outcomes and user experiences. In the PPP market, it appears that any general media criticisms associated with service and user experience in a few projects can outweigh the greater number of PPPs that have been delivered on-time and on-budget, and which operate successfully in meeting contracted Key Performance Indicators (KPIs).12 Public-Private Partnerships typically deliver projects within cost and time expectations, and the transfer of risks to the private sector are real. In many examples the public purse has been protected from cost overruns13 and the pressure to perform has PPP projects consistently being delivered on-time or early.
UNIVERSITY OF MELBOURNE