Can public-private innovation partnerships improve public services? Evidence from a synthetic control approach

Public-Private Innovation (PPI) Partnerships can generate innovative approaches to improving public services. However, incomplete contract theories point to difficulties in making public-private collaborations work effectively and efficiently. Drawing on these theories, we analyze the transfer of the management of a children's social services department in a large metropolitan government in England to an "improvement partnership" between the local government and two private firms. Using a synthetic control method approach, we find little evidence of improved health or educational outcomes for looked after children during the years following the creation of the partnership. However, there appears to be an increase in the costs of providing children's social services, which documentary evidence suggests may be attributable to weak contract management capacity, difficulties embedding performance monitoring, and additional expenditures on the partnership's reform programme. Our findings therefore highlight that effective supervision of PPI partnerships is essential for making them a success. Evidence for practice Partnerships between public and private organizations have become popular worldwide as a way for governments to develop innovative and cost-effective solutions to pressing public problems. Public-Private Innovation partnerships require careful management to be an effective vehicle for improving public services. Strong contract and performance management capabilities are required to coordinate the involvement of private partners in the strategic management of public services.