Public/social/private partnerships are methods of
co-operation between private and government bodies.
Background
Models of cooperation between the market and the state:
examples from Austria
The name “public social private partnership” (PSPP) is a
development of
Public Private
Partnership (PPP).
PPP is one expression of a strong trend towards (re)
privatisation, which in some European
countries has arisen as a result of more difficult economic
conditions in recent years and the associated structural crisis in
the public sector (see Eschenbach, Müller, Gabriel: 1993).
The growth in
public-private
partnerships as a way of fulfilling public tasks in partnership
between the state administration and private enterprises must be
seen in this context.
In political discussions, lack of public funds is often put forward
as a limit on state activities. Instead of financing infrastructure
projects alone, the government increasingly looks to cooperations
with private investors. Also, the
EU policy on competitive tendering of public works and
services has forced changes towards a more market-oriented approach
to delivering tasks for which the state is responsible. Another
relevant factor are the arguments in debates on privatisation that
state bodies are inefficient and that management concepts typical
in the commercial sector should be used to achieve more
cost-effective provision of public services.All these factors taken
together result in a shift away from a role of the state as
“producer” towards one as “quality assurer” and a trend away from
collective, tax-based financing of infrastructure to financing
models in which these are paid for by their users (see Budäus
2006).
The term PPP has gained currency for this increased cooperation of
government with private partners in the German-speaking countries
since about the middle of the 1990s.
Public private partnership contrasted with conventional
provision of public servicesPPPs can be said to differ
from other forms of provision of public services in the following 3
points:
- In PPPs, the ownership of the project is shared. The heart of a
PPP is thus the sharing of risks and profits.
- Compared to providing the service directly, in a PPP the state
can concentrate on its core competences. The state does not need to
allocate experts of its own for the implementation of the project
and is thus less intimately involved.
- Additionally, PPPs exhibit a trend away from conventional,
tax-based financing approaches towards financing through
contributions of individual users (e.g. tolls for motorways).
From PPP to PSPP
In the social services sector, PPPs have been implemented mainly in
the health services and overseas development until now.
As current
discussions about PPPs in the social services sector show (see e.g.
the EQUAL development partnership “Public
Social Private Partnership” [479642]; workshop at the University of
Cologne
, Germany
“PPP in
social and educational services”, March 2006; Conference:
“Partnerships in Work Integration: Added Value for Enterprises?”,
Zürich
, Switzerland
, October 2005), this sector has special
requirements and will need special conditions and criteria for
possible PPPs. The definition of goals is a particularly
central and sensitive issue in finding a suitable form and
modalities of implementation of PPPs in this area. Existing types
of PPP will likely need to be modified to include extra mechanisms
and criteria in order to function adequately in social
services.
In other words, public social private partnership (PSPP) is not
merely an extension of the PPP idea, but a precondition for
ensuring that a PPP with a social goal:
- assures and implements the public aims, agendas and tasks in
the sense of community benefit, welfare, etc.;
- adheres to and sustains the agendas and aims of cooperations in
the mid- and long-term;
- plans and suitably applies the necessary conditions and
resources (e.g. financing) for sustainable results.
For the
state side of the
partnership the redefinition from PPP to PSPP means that mid- to
long-term solutions are found for functions that the state needs to
fulfil for reasons of the common good or welfare provision. By
addressing state functions in the form of partnerships, the state
partner gains options for action: firstly through a cooperative
form of
outsourcing (including
financing) and secondly by involving additional partners from
private enterprise and social enterprise in doing things which the
state has responsibility for. Both of these aspects allow the state
to do its job in a more rounded, professional and sustainable way
by bringing in additional finance, expertise and practical
resources.
For private enterprises, PSPP opens up possibilities for new kinds
of business activity through the cooperation with the state and
social enterprise.
PSPPs offer social enterprises an opportunity to act in their ideal
role of intermediaries between the state and private sectors,
helping to make sure that each partner’s contribution to the
project is in an area where they have special competence. This
reduces the risks for all partners. The social enterprise partners
stand to gain from a PSPP in terms of planning, development and
quality due to the mid- and long-term nature of the projects.
Finally, for target groups of disadvantaged people, PSPPs can mean
the assurance of services that they need, and that the welfare
state has led them to expect; and also, mid- and long-term PSPPs
have the chance to anticipate future needs and develop innovative
solutions and services.
To summarize, application of a PPP model to fulfilling social aims
for people in disadvantaged situations naturally leads to expansion
of the PPP to a PSPP. PSPP rather than PPP criteria become
applicable when public aims such as the common good and welfare are
being pursued. In this area, all the mid- and long-term indicators
of success belonging to the agendas and goals of the cooperation
depend on the correct adherence to PSPP specifications.
PSPP: public social private partnership – description of the
model
Description
Observing the discussions among representatives of social
enterprise on the issue of “public social private partnership”, it
becomes apparent that it is necessary to distinguish between a
broad and a narrow definition. The definition can be regarded as a
basis on which a specification is to be constructed.PSPP in the
broad definition covers, like PPP, cooperation models between the
participants. In the case of public social private partnership
these are not only agencies of the state and private enterprises
(as in PPP) but also social enterprises and social economic
organizations. The focus is on the partnership formed between the
participating organizations and enterprises with the aim of working
out and implementing social aims.The two main characteristics of a
PSPP in the broad definition are therefore:
- The social purpose: Carrying out activities for the protection,
support and improvement of opportunities for disadvantaged people
or groups of disadvantaged people.
- Implementation in partnership: The concept of partnership
between firstly public, secondly purely commercial and thirdly
social economic organizations and enterprises.
The specification of the PSPP model makes sense because of the
needs of disadvantaged people and of the social economy and also
those of the state and private enterprise mentioned above. In order
to ensure that disadvantaged people are not excluded completely or
partially from social participation, their needs must be supplied
long-term and uninterruptedly. To do this, the relevant social
services must be provided. This can only be guaranteed through
longer-term financing.For that reason, the narrow definition of
“public social private partnership” picks up on the financing
aspect of the functional description of PPP and attempts to see how
this can be harnessed for social interests. Also in this case the
partnership aspect is important (see below), and only through it
can the long-term nature and opening up of new fields of action be
achieved.
A PSP partnership is thus related to a specific field of activity
and has the explicit purpose of assuring long-term financing and
generation of resources for products and services in order to
fulfil purposes of social protection, support and improvement of
opportunities for disadvantaged people or groups of disadvantaged
people: PPP as a financing and resource-generating instrument
becomes PSPP in this case.
The following three main characteristics make up a public social
private partnership:
- The “S” of the name indicates exactly the goal and purpose of
the financing tool: the servicing of social protection and support
interests and activities for the improvement of opportunities for
disadvantaged people or groups of disadvantaged people.
While PPPs as described in the literature as being used to execute
public tasks in general, in PSPP the scope is narrowed to
specifically social topics.
- A PSPP has the character of a financing or resource-generating
instrument.
In order to act in the interest of social protection and support,
i.e. to provide social services or introduce social products, in
many cases it is necessary to set up and operate
infrastructure.PSPP projects therefore aim at financing
infrastructure that is used to realize social services and
products. In this respect PSPPs do the same thing as PPP projects,
which are also usually set up to finance infrastructure.To provide
social services it may not always be necessary to set up
infrastructure on a large scale, but it is always necessary to
carry out a phase of developing, planning and organizing the
prerequisites for providing the social services. PSPP as a
financing instrument can thus also be used to finance the
development and preparation of social products and services that do
not require any large infrastructure investments.Different
financing instruments are used depending on whether infrastructure
needs to be financed or not.
- “Partnership” means that to operate the tool at least two
partners are required that will generate the finance and other
resources needed to achieve the shared goal “s”.
The PSPP characteristic “partnershaft” is also similar to a PPP.
Three characteristics of PPPs identified by Budäus (2006:19) will
be integrated at this point:
- Partnership principle in the sense that the aims and
expectations of benefit of the participating partner enterprises
and organizations are compatible with each other.
- Partnership principle in the sense of creation of
synergies.
- Identity of the partner enterprises and organizations remains
intact.
Also in this point PSPP differs from the conventional methods of
delivering state services. In contrast to PPP projects, which can
be formed with only two partners, “partnership” in the case of PSPP
ideally involves a minimum of three partners, since there are three
essential but different roles to be filled: The financing of the
project, the project leadership and the demand for the social
services.
In a PSPP three functions must therefore be exercised:At least one
of the partners ensures the financing (financing level), at least
one of the partners takes on the overall responsibility for the
project and thus leads the coordination of the project from
planning through setting-up and realization of the social product
or service (project leadership) and at least one of the partners
ensures the flow of funds into the project by buying the product or
service (so also contributing to the financing).These three
functions are – as described under roles and functions – ideally
taken on by three partner enterprises and/or organizations that
have the relevant competences and responsibilities. As a minimum,
the synergies can also be created between two partner enterprises
or organizations, so long as the three functions are present.In
this way, a PSPP partnership is a partnership between two levels:
the financing and the practical level.
Purposes
According to their historically conditioned self-understanding,
contemporary European states have highly diverse tasks. A centrally
important role is the social interest in various protective
functions and activities. Besides the basic function of the state
and community to stabilize or if possible to improve socially
precarious or unstable conditions, the state has the duty to
protect the weak and endangered at all levels of state activity,
i.e. by law, in the justice system and in the administration.
Typical areas in which the state intervenes to protect people in
weaker positions are consumer law, residential property rental and
of course social law. The way the state(s) go about implementing
these measures has to be seen against the background of the whole
legal framework; the legal principles and practical methods
involved are subject to continual theoretical (e.g. in terms of
sociology, political science or philosophy) and practical (e.g. in
the popular media or political interest groups) discussion.
Connected to the issue of “protection” are terms such as “common
good”, “human dignity”, “equality”, “welfare”, “clientèle
politics”, etc.
If the duty of the Hobbesian “Leviathan” to guarantee and provide
protection is primarily related to individuals or subgroups of the
state’s population, then the interests of social maintenance
directed towards the state will focus mainly on the assurance of
whole-society pluralities and minimum standards. The interest in
social maintenance stands alongside the interest in protection and
complements it. For example, the laws that regulate the entitlement
to unemployment money belong to the “protection” sphere, whereas
the laws on the activities of political parties belong to the
“maintenance” sphere; the overlapping of the two spheres of
interests becomes evident when various parties, according to their
political programmes, (can) take influence on the laws that govern
the situation of unemployed people, by changing laws through the
mechanisms provided by law for creating legislation.
Such social “protection” and “maintenance” interest being addressed
to the state place a duty upon it to serve these interests through
legislation and in the exercise of executive power; both in the
inner sphere of lawgiving, justice and administration and in the
outer sphere of cooperation with non-state actors in the form of
“social partnerships”.
The legal phrase “
Gesellschaftliche Schutz- und
Erhaltungsinteressen", i.e. social protection and maintenance
interests, only partly defines the goals of a PSPP. This needs to
be expanded for the purpose of the present discussion to
“activities to improve the living situation and opportunities of
people and groups of people in disadvantaged circumstances”. This
expansion is more specific because it refers to people. However,
the question as to when people or groups of people are or become
socially disadvantaged remains open.
As a point of reference for PSPP the principles of action of a
democratic state should be chosen. The democratically legitimated
state follows principles of the common good as a way of
“guaranteeing [its citizens] optimal overall opportunities for
living and expression/development” (Reinhold 2000:204). The state’s
conception of what the common good is, is expressed in laws. This
makes constitutions and city statutes the most suitable indicators
of the smallest-common -denominator consensus as to what can be
considered to be the common good in a democratically organised
society. Beyond this, at any particular point in time the current
government is an expression of the society’s current vision of the
common good.If we follow the chain of the “common good” orientation
down from the national to the local level, we arrive at other
structures e.g. in Austria the provinces and the local
communities/municipalities, each of which has to some extent its
own definition of the common good.If certain people or groups of
people do not have full access to the elements of what, as
legitimated by the democratic legal system, is regarded as an
acceptable minimum level of income, welfare, general living
conditions and social participation, then we can say that they are
socially disadvantaged.
The state has the task of preventing social disadvantage and
therefore has a duty to intervene wherever these basic needs cannot
be filled by the market alone.The reactions of the so-called civil
society to disadvantageous circumstances may make disadvantage
visible. This is most obvious when non-governmental alternative
organizations and projects are started by citizens in order to
relieve the disadvantages. These could be individual citizens,
social economic organizations, self-help groups, and social
projects in general.
We emphasize at this point that this does not imply a normative or
prescriptive definition of what should be classified as social
disadvantage. A descriptive approach, which takes account of the
overall social system and its mechanisms of legitimation, was
chosen.
Also, on the descriptive level – based on this definition – diverse
characteristics of people or groups of people can be described, as
a consequence of which these people may be disadvantaged:
The results of empirical social research show that there are three
main factors that have a stronger and more predictable effect on
social standing and opportunities, and therefore potential
disadvantage, than others: These factors are:
- Social class
- Gender
- Ethnicity and/or nationality
Besides these, many other factors can also be important. The most
often mentioned are physical and intellectual abilities, sexual
orientation, age, religion and educational level (in strong
correlation with social class). The list of potential factors that
could contribute to social disadvantage can, however – since it
depends on the dimension mentioned above, the society’s consensus
on what represents the common good – never be complete, because
factors that can cause disadvantage are always dependent on
specific situations and issues.
The definition of aims is the heart of a PSPP. Because of this, all
components of a PSPP (the interactions between the participating
partner enterprises and organizations, the roles and functions in
the partnership and the setting-up and practical implementation of
the project) must be compatible with the specific set of aims
defined by the partnership and must serve to realize these aims.On
the other hand, the route to realization of a specific, agreed goal
and the structures that are set up to allow the project to be
realized, should conform to the general definition of aims
described here. This means that the structures and agreements of
the partnership and the project process itself must be designed so
that these also serve to improve the living situation of
disadvantaged people as defined above.
Roles and functions
In a PSPP three main roles are exercised:
- Financing of the infrastructure for
implementation of social products and services, i.e. Financing of
development of social products and services
- Project Leadership i.e. research / analysis of
needs, ideas, coordination from planning through set-up and
operation
- Demand: Assurance of cash flow by agreeing to
buy the products and services
All three roles can be done by different partners. But in the
different sectors involved (state, social economy, private
enterprise) each has its own interests and areas of competence, so
that they will naturally have different interests and priorities as
to the roles they wish to play in the partnership.
Preconditions for a PSPP
Building on the previous remarks on the PPP concept and the related
quality model PSPP, we can posit as a precondition for the step
from a PPP to a PSPP the willingness of all parties involved to
define / accept only solutions, aims and agendas that will have
mid- to long-term character. (By this we do not mean that the
products of the partnership could only be generated in the mid- to
long-term; this is not the same thing). This applies both to the
goals themselves and also in the sense that conditions should be
created that make it possible for the products of the partnership
to have a lasting effect.This condition, arises, in contrast to a
PPP, from the fact that the agendas of a PSPP are tasks and aims of
the state (common good / welfare) that do not obey the laws of
supply and demand. These goals and contents lie instead in the
delivery of an agreed level of common good to civil society. Such
fundamental social agreements are central and necessary building
blocks for a social peace based on security and justice, where
citizens can rely on pre-agreed levels of state functions and can
set up their lives accordingly. This is a precondition for
preventing people from being disadvantaged or finding themselves in
living situations that tend towards them becoming disadvantaged.In
this way, “mid-term” PSPPs can be defined as those that have a
similar lifetime to the electoral cycles of municipalities and
states; any that take place on a longer time base can be called
long-term (quantitatively), and can be seen as (qualitatively)
supporting the long-term assurance of state supports promised in
constitutions and municipal statutes.
Order of events
The starting point of a PSPP is a recognition by a social
enterprise of a social problem (e.g. an organization working with
disabled people realizes that many people with disabilities in
rural areas are faced with a problem of distance between their
homes and workplaces). An idea is formed about how this problem
could be solved, and the social enterprise develops a concept –
drawing on their long experience and expertise in the area – for a
social service, for which some infrastructure needs to be set up
(e.g. sheltered accommodation close to the workplace, in which
various needs, depending on gender, age or cultural background, can
be catered for). In order to be able to realize the project, the
social enterprise approaches a partner enterprise that could supply
the necessary finance (e.g. a local bank) and brings in a state
agency that has an interest in the project being done (e.g. the
local social service responsible for people with disabilities, or
the regional social department). This ensures the cash flow by
buying the social service and makes possible a more economical
financing by the commercial partner.The social enterprise then
plans the execution of the project, sets up if necessary a legal
vehicle for the project, sets up the necessary infrastructure
(builds the sheltered housing project) and realizes & runs the
social service (the support of the inhabitants).In this example,
the order of events and some division of roles is already evident.
The phases of a PSPP can be summarized again as follows:
- Needs analysis
In the needs analysis, factors that cause and/or reinforce
disadvantage are researched and analysed.
- Idea
- Development of social products and
services
- Setting-up of the financing partnership with
state and commercial organizations
- Planning of the practical implementation
- Setting-up of the infrastructure or other
preparations for realizing the products / services
- Implementation: Operation of the
infrastructure and provision of the social services / supply of the
social products
Financing
The classification of the models is based on PPP models, since
forms of cooperation between two partners can be taken as a
starting point for forms involving three partners. The description
above thus includes the models to be found in PPP practice, with
the exception of the company management (Betriebsführung) and
company transfer (Betriebsüberlassung) models, since in these no
positive effects are to be expected if a third partner were brought
in, and these forms exhibit the lowest efficiency gains of all
PPPs.
Financing instruments as additional elements of PSPP:
The starting point of (true) factoring is a long-term contractual
arrangement between the municipality and a private person, on the
basis of which the private person provides a public service. Due to
the assured flow of payments (payment according to time) this model
could in principle be considered for all PSPPs. The factoring
consists in the further stage in which the private operator / owner
sells a part of the future income from the contract with the state
at cash value (minus a commission) to a factoring institute and
uses the price to finance the project, so that only a low level of
owner’s equity is needed. (see Kirchhoff 1995). This is especially
useful for medium-sized enterprises, in order to compete with the
strongly capitalized large corporations.
In addition to the factoring by the private partner, it is not
uncommon to further optimise the financing costs in PSPP by adding
a guarantee given by the municipality / state authority to the
other forms of security provided for loans.
Silent partnerships involve a limited-term raising of capital by
bringing in a silent partner, who normally comes in simply for the
dividend. (see Kirchhoff 1995).
In certain models for communal social economic purposes, public
financing aids in the form of reduced-interest loans or investment
grants can be availed of in addition to private-sector capital and
equity. The EU, the federal republic and the provinces offer grants
for research, planning and implementation of communal social
investments.
Sponsoring is essentially an exchange transaction (see Arnold,
Maelicke 2003). The sponsor pays the sponsored organization in the
form of money, in kind, or services. In return the sponsor acquires
certain rights to advertise its involvement. It therefore uses the
sponsored organization as an element of its advertising strategy.
Both sides ought to derive benefit from the exchange.A further
constitutive feature of sponsoring is the contractual definition of
the quid pro quo. Both parties must clearly understand their
contractual obligations. A written contract is not mandatory, but
is much to be recommended.
Another possible financing method is the issuing of bonds.
Investors can take out a bond with a reduced interest rate and in
this way make an indirect donation to PSPP projects. Compared with
typical bond schemes, whose interest levels are coupled to the
credit rating of the company, and have minimum volume limits of
approx € 50 million (or € 5 million in the case of the new mid cap
bonds), social bonds, with the waiver of a part of the interest by
the investors, have definite advantages for social enterprises. A
successful example is the “ELAG SOCIAL bond“ (ELAG=Elisabeth
Liegenschafts-Entwicklungs-Aktiengesellschaft, Elisabeth Real
Estate Development Stock Corporation). This stock company formed by
the Caritas of the
diocese of Linz
and the KOOP Lebensraum Beteiligungs-AG has used the bond issue to
ensure compliance with its investment rules, which specify low-risk
investment, charitable-social purpose and investment in properties
that should yield dividends not less than the rate of
inflation.
Description of various PSPP models
Service models
Contracting-out generally means hiving off organizational units as
private entities and/or purchase of services from private providers
under the state contracting/tendering rules. This is the state
equivalent of the already well-established trend in commercial
business of outsourcing in order to concentrate on one’s core
competence (see Müller, Prankebenberg 1997).
Special financing forms
The minimal specifications of PPP as regards communal leasing mean
that not all leasing activities of municipalities qualify for the
title of PPPs. Especially, much product leasing, such as simple
leasing of equipment without services, does not fall under the
definition of PPP. The leasing variants that qualify as a form of
PPP are those in which an investor chosen by competitive bidding
supplies more than the mere provision of financing, e.g. by
providing complementary services and taking on additional practical
tasks. The private partner in such cases is responsible for major
pieces of implementation of a project. (see Höftmann 2001).
Concession models are similar to leasing models conceptually and in
terms of the applicable accounting rules, but all the restrictions
of leasing, particularly problems of tax and property law, are
avoided. At the centre of the model is the waiver of preferential
tax treatment both on the part of the project leader and the
finance provider, so that in the concession model no savings can be
made on the basis of taxation technicalities. The less stringent
conditions for setting up such a vehicle thus have their price and
are reflected in higher annual rates of rent compared to leasing
(see Scheele 1993).
Provider model
The basic idea of a provider model is that the municipality hands
over the fulfilment of its statutory tasks to a private provider in
such a way that the complete task is temporarily outsourced. The
municipality private capital and expertise is brought in to a
project during the setting-up and operational phases, without the
private partner acquiring shares in the operating company –
effectively a form of limited-term privatisation (see Rudolph,
Büscher 1995).
Since the operator models with a lifetime of 20-30 years are
long-term arrangements and a premature transfer back to the
municipality is not possible, BOT (build, operate, transfer) models
with a lifetime of three to ten years have been developed as a
shorter-term variant. (see Kirchoff 1997). These are basically
transitional solutions with private-sector planning and setting-up
as well as temporary private-sector operation in the relatively
risk-intensive early years, so that BOT models could be called
short-term operator models (see Höftmann 2001).
The basic idea of a cooperation model is the setting-up of a
private legal entity, in which both the municipality and at least
one private enterprise hold shares either directly or indirectly
(through an intermediate holding company). This type of mixed
municipal/private, or semi-state ownership has been in common use
for about 100 years, especially in utilities with a local monopoly
on provision (see Hering, Matschke 1997).
Limits and risks
PSPPs offer not only opportunities but also bring risks, especially
for the state partner (and their budget). Entry into a PSPP on the
part of the state is based on the expectation that additional
resources can be generated or mobilized in order to increase the
scope of public social services.Due to the responsibilities of the
state, the state partner must carefully evaluate what is made the
subject of a PSPP – with whom, for how long and under what
conditions. Long-term effects must be anticipated. The evaluation
process needs comprehensive, long-term and operational criteria,
quality assurance, a political decision and a critical analysis of
the PSPP as to its suitability as an instrument for the intended
purpose. For public institutions, a PSPP can increase the room for
manoeuvre, but this process must not take place at the expense of
erosion or abdication of responsibility by the state authority.The
state must be careful not to surrender control of activities over
which it is democratically mandated to exercise adequate control.
This issue is the subject of extensive discussions as it applies to
PPPs: the growing influence of private actors and the
correspondingly retreating influence of the state (see e.g. B.
Pölzl/Preisch 2003: 41).This makes it all the more important to
emphasize that PSPP models should only be supported by the state in
cases where they serve the long-term social needs of disadvantaged
members of society. This responsibility belongs to the state and
the state only.
To reap the full benefits of a PSPP for all involved parties, it
must be ensured that the clear definition of social aims and
partnership process on the one hand is not outweighed by the
impetus to generate and mobilize resources and finance on the other
hand. It is essential for the implementation of a PSPP to preserve
the partnership throughout. This means that the autonomy of the
social economic partners must be protected and they must not be
brought into a position of such dependency by entering a PSPP that
their autonomy is sacrificed or weakened.
Since public goals and agendas can be matched to mid- and long-term
solutions by using PSPPs, a qualitative approach can be used.
Some concern about the quality of the services that are provided in
the course of PPPs exists both in public opinion and among some
representatives of the state sector. The specification of a PSPP in
terms of the social aims (in contrast to PPPs) is a positive
quality factor. Due to the orientation of the model according to
these aims and the resulting processes and conditions (needs
analysis and product development by experts working in the social
sector, partnership principles, etc.), the model places great
emphasis on the quality of implementation of the PSPP. Nonetheless,
it must be said that the quality of the social products and
services produced will always be the responsibility of
- the people and organizations who have the decision-making
competence in development and implementation of the social products
and services;
- the internal project controlling;
- and the enterprises and organizations that control all the
relevant aspects of the environment in which the project takes
place (financing, regulation of activities, etc.) through the
partnership negotiation process; this requires responsible and
serious behaviour not only on the part of the private and
social-economic actors but also crucially on the part of the state
representatives.
Prospects: opportunities and potential
If the conditions for when a PSPP should be used, and the quality
criteria, are respected, a PSPP can be of great benefit for the
social target group it aims to help as well as for the
participating organizations and enterprises.
In a PSPP, needs of disadvantaged people or groups of people that
have been previously neglected can be met, or the spectrum of
services available to them can be expanded. Private enterprises are
usually strongly oriented towards meeting customer (consumer)
demands. In a PSPP this also applies to the social enterprises,
which in contrast to non-social economic enterprises and
organizations exhibit a stronger responsiveness towards the needs
of their clients.
The solutions developed in a PSPP can also be offered on a mid- to
long-term basis and thus contribute to a sustainable establishment
of new activities and structural change.
For private or social economic enterprises / organizations, the
participation in a PSPP offers an expansion of their fields of
business and the opportunity to become active in already
established and newly developed fields as competent partners.
Social economic organizations or enterprises gain an opportunity to
make necessary longer-term investments which would not be possible
in a conventional working relationship with the state (i.e. by
simple buying of services by the state).
On the other hand, the state can make use of the specialist
expertise of the social economic and private companies. This should
allow all the participants to concentrate on their core
competences. The state can gain an opportunity to do the tasks it
is responsible for efficiently, cost-effectively and without delays
due to budgetary bottlenecks.
In addition to the special benefits for disadvantaged people, the
positive effects of “classical” PPPs apply (Pölzl/Preisch 2003):
- Exploitation of synergy effects through mutual sharing of
information and capabilities
- Opening up of new ways of financing investments
- Goal-oriented division of tasks and functions results in
increased efficiency
- The previous two points, taken together, result in time
savings
- Smaller risks for individual participants through sharing of
risks
The opportunities offered by PSPPs can be exploited best when the
participating organizations can avail of the necessary know-how in
the form of accompanying consulting and support by appropriate
professionals. In Austria, even PPP is still a relatively new
phenomenon – in contrast to Germany, neither a national “PPP
Facilitation Act” nor PPP Task Forces to ensure professional
setting up of PPPs. The expansion of the PPP concept by adding the
qualitative aspect of the explicit social aims is even more
dependent on competent support to implement the relatively complex
projects with good quality and successfully. Not only purely
private/commercial approaches on the one hand need and public
administration principles, rules and procedures on the other hand
need to be dealt with, but also the competences needed for the
social service elements need to be fitted together suitably.
From the point of view of social policy, PSPPs, if the procedure
described is followed and needs analysis is done by social economic
organizations and enterprises working in the field, can open up new
fields of activity, not only for the social and private enterprises
but also for the state. PSPPs are a chance for development of
social services not as a purely top-down process (in which the
state formulates the needs and contracts the corresponding works)
but that needs can be recognized and formulated by agents and
organizations of civil society and these can be met in cooperation
with the state. To make use of this chance, the state must be
flexible and open to innovation and the political and legal
environment must be compatible with this bottom-up approach. Many
established social phenomena, e.g. the Red Cross movement or the
women’s emancipation movement, began in the private or
civil-society spheres and were later picked up and supported by the
state; and through state support, their development was importantly
influenced.
Literature
- Brooks, Stephen: "The Mixed Ownership Corporation as an
Instrument of Public Policy". In: Comparative Politics,
Vol. 19 (1987), No. 2, S. 173-191
- Budäus, Dietrich (Hg., 9): "Kooperationsformen zwischen
Staat und Markt. Theoretische Grundlagen und praktische
Ausprägungen von Public Private Partnership",
Schriftenreie der Gesellschaft für öffentliche Wirtschaft,
Heft 54, Baden-Baden 2006.
- European Commission: Green Paper on Public Private Partnership,
Brussels 2004; [479643]
- Kukovetz, Brigitte; Leonhardt, Manfred; Loidl-Keil, Rainer:
Public Social Private Partnership zur Realisierung sozialer
Dienstleistungen, In: kontraste, 02/07.
- Mitchell-Weaver, Clyde; Manning, Brenda: Public-Private
Partnerships in Third World Development: A Conceptual Overview. In:
Studies in Comparative International Development, Vol. 26
(1991-92), No. 4, S. 45-67.
- Modigliani, Franko; Miller Merton: "The Cost of Capital,
Corporation Finance and the Theory of Investment". In: American
Economic Review (June 1958).
- Parkin, Frank: "Strategies of social closure in class
formation", In Parkin, Frank (Hg.): The social analysis of
class structure, London 1978, S.1-18.
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