Why should the government care about procurement? Because the public does.

The Covid-19 pandemic has brought procurement firmly into the spotlight through high-profile public-private partnerships (PPPs) such as the USA’s Operation Warp Speed or the UK’s Test & Trace. It has revealed several important flaws in current procurement procedures, raising concerns that under certain conditions private interests may be able to unduly influence PPP-delivered public goods and services.

If PPPs can lead to situations in which private interests prevail over those of the public when deciding which type of infrastructure and services should be delivered, it becomes difficult to justify their use. Questions arise from such procurement decisions, such as: Should private companies be allowed to profit from crises? Are governments dependent on private finance to deliver essential public goods? If so, how does this affect the balance of power between the government and private partners? Taxpayers risk losing vast amounts of money if hybrid governance arrangements such as PPPs are misused, as the enormous cost of Test & Trace could be argued to illustrate.

Much is at stake democratically in the use of PPPs like Test & Trace. Existing research focuses mainly on when PPPs are more likely to succeed or fail. My research brings the voter perspective into the picture, suggesting that voters are sensitive to the poor performance of PPPs and that more politically knowledgeable individuals are more sensitive to the risks that come with private involvement in the delivery of essential public goods. Voters, in short, do pay attention to how their goods and services are delivered and poor performance can translate into fewer votes for incumbent governments.

PPPs have political pay-offs and come with political risks. Despite their mixed performance record, however, they continue to be used by many governments around the world. This has resulted in an arguably suboptimal situation wherein PPPs often seem to offer greater value to private sector actors than to the taxpayer. Policymakers should heed the public’s sensitivity to modes of public service delivery and try to step out of the current paradigm that relies heavily upon private finance and involvement.

Government procurement divisions can change how public goods and services are delivered. High-private involvement contracts such as PPPs are associated with fiscal risks as they take debt off the balance sheet in the short term, but leave the government on the hook for long term obligations that may be unsustainable. That is in addition to well-known issues with cost overruns, delays, and renegotiations. As such, when considering future investments, such government divisions may want to consider rethinking the public-private balance on major contracts and consider long-term investments in public sector capacity and expertise to be able to manage more in-house and rely less on the private sector.

My research suggests that the public is supportive of finding new ways to fund projects if performance does not suffer. Given the chequered performance record of PPPs and the complexity, scale, and urgency of the issues faced by governments today, it seems that the time is ripe for a re-evaluation of the degree of private involvement in how we procure to address these challenges.

Dr Eleanor Woodhouse is a Lecturer in Public Policy.