Vermeer, Daniel Marinus Maria; (2019) Collective learning in strategic Public Private Partnership (PPP) procurement systems for social infrastructure. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

This thesis explores how organisations involved in temporary joint ventures established for strategic Public Private Partnership (PPP) procurement systems arrange themselves and learn collectively so as to deliver a portfolio of social infrastructure, in terms of meeting or exceeding agreed performance criteria for whole-life value for money and environmental sustainability. This PhD research fulfils a gap in theory about the systematic way in which organisations involved in strategic partnerships can learn collectively and how this affects their performance. Theories and tools that underpin organisational learning and collective learning affiliated to temporary organisations are considered. The research also examines insights into the principles of value for money and partnering in construction, risks and benefits in complex procurement, project-based environments, total quality management, systems thinking and performance improvement inherent to strategic PPP procurement systems. The novel and unique contribution to theory made by this thesis is the exploration of how the parties to this complex form of PPP learn collectively. How learning can reveal itself in permanent construction organisations has been well researched by scholars, as has how learning can take place in temporary organisations that are often seen in the construction sector. However, what is lacking is a common understanding of how this learning occurs in a complex hybrid form of organisation, one where multiple permanent public and private sector organisations are working together strategically to form new long-term temporary organisations on a repeating basis. This research tries to understand how learning can take place in this specific hybrid organisational structure. It is a relatively rare and complex organisation type that can be proposed by governments to attempt to procure projects in a more systematic way instead of piecemeal, and taking a whole-life value approach to projects. The critical evaluation takes the case of Building Schools for the Future (BSF) in England, a highly ambitious capital programme that commenced in 2003, and was summarily cancelled in July 2010. Its aim was to transform all English secondary (and later also primary) schools into shining examples of 21st-century education provision, setting new norms for the schools estate. The work comprises a critical evaluation of strategic PPP procurement systems for the delivery of social infrastructure under BSF, called Local Education Partnerships (LEPs). The exploratory research is based on a mixed method comprising both quantitative and qualitative elements to identify, by taking a phenomenological approach, what the key objects studied (key LEP participants and LEP-built schools) share in common. Of the 44 LEPs that were established, 12 have been investigated as a form of strategic PPP procurement in England, as well as 600 schools worth approximately £9bn delivered by all LEPs between 2006 and 2015 as part of the legacy BSF programme. Any LEPs that had reached financial close prior to the programme termination date were analysed, especially those that had reached high levels of maturity. Performance parameters of schools procured through LEPs for value for money and environmental sustainability are identified and analysed across the procurement stages: design, build, maintain and operate. Further data is obtained from a major survey of 72 participants involved in 12 operational LEPs, along with information about their contractual and financial PPP and Private Finance Initiative (PFI) development and delivery structures. The theoretical base is drawn from management science domains of organisational learning. Based on the analysis and findings, learning collectively in PPPs appears to be a crucial factor for improvement in getting better whole-life value for money and environmentally sustainable assets. For that reason, a learning framework called the Asset Value Enhancement Model (AVEM) is introduced and discussed using elements of systems thinking, continuous improvement and total quality management. It embeds collective learning over time from organisations involved in a long-term strategic partnership, as the underlying assets travel through their lifecycle. The circular nature of the model (double-loop learning and Plan-Do-Check-Act) calls for a joint commitment, shared culture and aligned communication to cultivate ongoing value to the public and steady returns to the private sector, beyond merely project-specific improvement. After applying the AVEM in the context of LEPs, the research study concludes that the collective learning from eight contract performance mechanisms is diverse. The achievement of these performance requirements can be a good basis upon which to measure the success of the public private partnership in BSF. The results steer a wider discussion on interpolated theories of organisational learning, and especially how to achieve collective learning in strategic PPP procurement systems for social infrastructure. The research does not intend to promote nor criticise the legacy policy of BSF. Neither does it intend to make a political statement regarding the current and/or previous government. It does critically monitor, analyse and evaluate the complex procurement method using LEP companies that underpin the legacy BSF policy, and appraise the assets they have created. In particular, it looks at how learning collectively emerges between projects within a LEP (project-based) and the organisations involved in and between LEPs (inter-organisational). The procurement method is similar to that for the Local Improvement Finance Trust (LIFT) companies in healthcare and the hub companies for social infrastructure in Scotland, and not too dissimilar to other forms of bundled PFIs in the UK and worldwide. Beyond its academic value, this research might encourage understanding of and collective learning in a long-term strategic PPP when thinking about future innovations in procurement policy, both in the UK and abroad. The results may also inform the future policy and practice of strategic PPP procurement systems about how to deliver and manage infrastructure portfolios better, based on hard metric asset-level data.

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