Library / Thought Leadership
Against a backdrop of a championship course in Newport, John Kjorstad finds that the human experience of trial and error is still at the heart of public private partnerships.
When the 2010 Ryder Cup was held at The Celtic Manor Resort in Wales, the American team certainly looked the part to retain their title. They had abundant talent, confident swagger, and some freshly embroidered waterproofs designed by the wife of team captain Corey Pavin. However, when play got underway, they quickly discovered both the famous Welsh weather (heavy, persistent rain), and what many thought was the predictable flaw of sewing through waterproof fabric. The resulting controversy was a significant embarrassment for the US Team (and their apparel supplier Sun Mountain). The Americans quickly changed course and spent over £4,000 to buy replacement waterproofs from an on-course merchandise tent. A lesson was learned, but the Europeans emerged victorious.
Trial and error is part of the human experience. It can be costly, but it is also the most effective way of evolving to improve performance. 30-years ago, the UK Government was in the early days of developing a new model to finance and develop public infrastructure with private capital. The emergence of Public-Private Partnerships (PPPs) and the Private Finance Initiative (PFI) in the early 1990s resulted in a wave of carefully structured contracts that successfully delivered new schools, hospitals and clinics, accommodation, waste facilities, and transportation improvements.
Projects were generally delivered on time and on budget. But as with anything new, unforeseen challenges would eventually emerge as the assets were operationalised and maintained throughout the course of the contract. Many of these contracts are now nearing expiry and preparing for handover. Anxious public officials are keen to ensure that they receive back facilities in the promised condition they originally contracted for.
It was against this backdrop that public and private professionals from the world of operational PPPs arrived at The Celtic Manor Resort in December for the second annual Operational PPP Summit (OPPPS 25) and Awards. With a primary audience of facility managers, contract managers, investors, lenders, and advisors; Summit attendees worked through the lessons learned and ongoing issues still to be navigated on existing operational PPPs.
Fresh off the back of the recent UK budget delivered by UK Chancellor Rachel Reeves – which included plans for new Neighbourhood Health Centres (NHCs) to be delivered through a combination of public sector investment and a new model of PPPs – delegates carried a palatable sense of optimism into two-days of workshops, roundtables, and panel discussions. A recurring theme was that while the contract provides the framework, the actual success of a 25-30 year partnership relies on a continuous mantra of trust, empathy and collaboration.
The Summit kicked-off with a panel discussion to address “the people problem”. There is a major shortage of hard technical skills (such as aging surveyors) and soft skills necessary for effective contract management. Required skills include strategic planning, risk management, stakeholder management, compliance, and contract interpretation.
High turnover was also noted as a program risk, suspected to be driven by stress, “toxic work environments,” and a pervasive “perceived fear of failure” that leads to poor behaviors. Speakers called for employers to invest in skills development, build clearer career pathways (like apprenticeships), and emphasize the social impact of the work to appeal to the “social consciousness of young people”. They also stressed the need for greater resilience training.
Adding to this complexity is the fact that neither the public nor the private sector are sufficiently resourced to deal with the high volume of PFI contracts rapidly approaching their 25-30 year expiry dates. Many public authorities only secure dedicated contract management resources when they start an expiry team (at least seven years before expiry). However, it was noted that the Department of Health was already doing “expiry health checks” on PFI sites ten years out from contract expiry to proactively identify common issues.
Innovation was seen as necessary for future performance, but it is often constrained by the rigidness of existing PPP contracts. Clarity of contracts on “pay mech and handback” was seen as crucial for expiry management. There was a call for more flexibility, and a clear mechanism for negotiating changes that could be seen as “win-win”.
For example, the industry is looking to use new tools, such as using AI and 360-degree cameras for quicker surveys. This technology could not have been envisioned when the contracts were originally signed, but can now provide significant cost savings and improve operational performance. Data is literally everywhere but must be used for trend analysis to promote positive change, and to measure performance against traditionally owned public estate. The consensus was that a consistent data capture structure and relevant KPIs are needed.
Delegates were not afraid to address other harder issues like the “weaponisation of contracts” – where when budgets are constrained on the public side, there is an alleged tendency to use the contract’s payment mechanisms more aggressively. This leads to relationship-eroding disputes that are often described as “adversarial”. The government said it was working on better mechanisms to resolve disputes and is looking to develop a “deliverable set of future contracts”.
Another common theme to resonate across sessions was how contracted partners handle challenging operational situations. This is often what differentiates between successful and failing PPP projects. A small minority of difficult stories make headlines, while the vast majority of successful partnerships hide behind the operational success of the contracts.
The lessons we learn from operational PPPs cannot be ignored, and the private sector needs to be open to sharing more data so it can shape future policy and help to extract even more value-for-money from this industry. For example, the new PPP model being discussed and supported by National Infrastructure and Service Transformation Authority (NISTA), is based on the acceptance that there will be public sector equity and greater sharing of information. The Welsh Mutual Investment Model (MIM) is another evolution of PFI, which includes up to 20% public equity, and excludes soft services. And beyond the UK, the PPP model continues to thrive in countries like Canada and Ireland where PPP has evolved to meet the local context, but remains viewed as a “great British export”.
As the Summit concluded, sunshine burst through on the final sessions carrying with it optimism and a desired sense of partnership. Authentic Welsh winter weather hadn’t disappointed those who arrived early for the first ever meeting of the Global Council for Operational PPPs (GCOP) the day before OPPPS 25. Severe rainfall disrupted travel and dampened the Celtic Manor estate. But unlike the Americans in their waterproofs 15 years ago, GCOP delegates were comfortably inside and prepared to make operational PPPs run more efficiently, effectively and collaboratively. Lessons were learned. And public services should emerge better for them.
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16 March 2026
