This article was downloaded by: [University of Birmingham]On: 05 October 2014, At: 20:25Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registered office: MortimerHouse, 37-41 Mortimer Street, London W1T 3JH, UK

Public Money & ManagementPublication details, including instructions for authors and subscription information:http://www.tandfonline.com/loi/rpmm20

Public–private partnerships in Flemish schools: acomplex governance structure in a complex contextKit Van Gestel, Tom Willems, Koen Verhoest, Joris Voets & Steven Van GarssePublished online: 29 Jul 2014.

To cite this article: Kit Van Gestel, Tom Willems, Koen Verhoest, Joris Voets & Steven Van Garsse (2014) Public–privatepartnerships in Flemish schools: a complex governance structure in a complex context, Public Money & Management,34:5, 363-370, DOI: 10.1080/09540962.2014.945808

To link to this article: http://dx.doi.org/10.1080/09540962.2014.945808

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) containedin the publications on our platform. However, Taylor & Francis, our agents, and our licensors make norepresentations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose ofthe Content. Any opinions and views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be reliedupon and should be independently verified with primary sources of information. Taylor and Francis shallnot be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and otherliabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to orarising out of the use of the Content.

This article may be used for research, teaching, and private study purposes. Any substantial or systematicreproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in anyform to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

PUBLIC MONEY & MANAGEMENT SEPTEMBER 2014

363

© 2014 CIPFA

PPPs need a clear, commonly accepteddefinition (Hodge et al., 2010). A broadspectrum of arrangements exists, fromtraditionally-procured government projectsthrough to full privatizations (Grimsey andLewis, 2007; OECD, 2008).

This paper focuses on long-term DBFM(Design, Build, Finance, and Maintain)contracts related to public infrastructure.Governments hoping to achieve the theoreticalbenefits of those partnerships face seriousgovernance challenges (Klijn and Teisman,2003; Bloomfield, 2006). Since knowledgeabout specific factors that contribute to a PPP’ssuccess or failure is limited, this paper aims toimprove the understanding of how thegovernance of PPPs affects their performance.

Evaluating PPP performance is difficult,given the different objectives and disciplinesinvolved in PPPs. Although ‘value for money’dominated much of the debate on measuringperformance in the past, there is an increasingawareness that overall PPP performance meansmore than just the achievement of value formoney or on-time and on-budget delivery (seeHodge and Greve, 2013). Jeffares et al. (2013)distinguish between a ‘narrow’ and ‘broad’definition of partnership performance. Theformer deals with ‘the achievement of particularservice or outcome targets as set out in thepartnership agreement (strategy, contract,business plan) and assessed in relation to otherfactors such as the cost of the partnership’soperations’. This goal-based evaluation may benarrow and straightforward but it is not asimple task: ‘Alternatively, partnership

performance may be conceived more broadlyand include consideration of the longer-termrelationship that might exist beyond the deliveryof a particular project or programme, and thewider benefits to particular individuals, partnerorganizations, citizens and service users’(Jeffares et al., 2013, p. 170). While broadeningthe scope of partnership performance withvariables like trust, co-operation and flexibilityis promising (see also Skelcher and Sullivan,2008; Voets et al., 2008), this paper uses anarrow definition of PPP performance focusingon goal-based evaluation; this means evaluatingsuccess based on the original criteria.

MethodologyA qualitative approach is the most suitable foranalysing elements of complexity and theirgovernance mechanisms, and then relatingboth complexity and governance to PPPperformance. Qualitative research can be animportant first step in the process of theoryconstruction (Eisenhardt and Graebner, 2007).The analytical framework presented here isapplied to a single case through a detaileddescription of its attributes and the relationshipsand dynamics within it (Yin, 2009).

This case is a Flemish PPP project called‘Schools of tomorrow’. This DBFM programmefor school infrastructure was selected becauseof its complexity as a promising example forfinding out how complexity, control andgovernance strategy relate to each other, andhow that interaction affects overallperformance. The methods used were a broaddocument analysis and semi-structured

Kit Van Gestel is aPhD student, PublicManagementInstitute, KULeuven, Belgium.

Tom Willems is apostdoctoralresearcher in theFaculty of Politicaland Social Science,University ofAntwerp, Belgium.

Koen Verhoest is anassociate professor,Faculty of Politicaland Social Science,University ofAntwerp, Belgium.

Joris Voets is anassistant professor,Faculty of Economicsand BusinessAdministration,University of Ghent,Belgium.

Steven Van Garsse isan assistantprofessor, Faculty ofLaw, University ofAntwerp, Belgium.

Public–private partnerships in Flemishschools: a complex governancestructure in a complex contextKit Van Gestel, Tom Willems, Koen Verhoest, Joris Voets andSteven Van Garsse

Public–private partnerships (PPPs) are used very widely but remarkably littleempirical research has been published investigating the governance of PPPs. PPPsare complex infrastructure projects and present important governance challenges asthe responsibilities of public and private partners are ambiguous and can be confused.This paper looks at the interactions between the elements of complexity and at thegovernance structure of PPPs, and their combined effect on performance. A casestudy in Flanders (the northern region of Belgium) is discussed.Keywords: Complexity; control; governance; performance; public–private partnership (PPP).

http://dx.doi.org/10.1080/09540962.2014.945808

Dow

nloa

ded

by [

Uni

vers

ity o

f B

irm

ingh

am]

at 2

0:25

05

Oct

ober

201

4

PUBLIC MONEY & MANAGEMENT SEPTEMBER 2014

364

© 2014 CIPFA

interviews (N = 9) with key players.

Case study: the Flemish PPP project‘Schools of tomorrow’ContextDecades of structural under-investment fromthe late 1970s resulted in an old and outdatedschool infrastructure in Flanders. Recently,Flanders has also had a growth in populationso additional school infrastructure is neededin many cities. There were 2,522 applicationsfor subsidy, worth 3.1 billion euro, on thewaiting list of AGIOn (the national agencyfor school infrastructure) in February 2013.In addition, the investment needs of ‘GO!’ (acommunity education programme) havebeen estimated at 1.9 billion euro (see table1). Waiting time for applications of new schoolinfrastructure projects is over 10 years,because of limited subsidies.

The Flemish government thereforelooked for new ways to construct and financeschool infrastructure that also added somevalue compared to the existing subsidies:accelerated project implementation, bettercost control, compliance with higher(innovative) technical requirements, andimproved availability and flexibility of schoolinfrastructure. In 2004, a two-track policystrategy was adopted by the minister ofeducation. One track was a large catch-upDBFM programme which would cost around1.5 billion euro. A DBFM company (SPV)would make sustainable, modern schoolbuildings available to school boards and takecare of maintenance for 30 years. In turn,school boards would pay a performance-related availability fee for the contract period,and the building’s ownership would betransferred to the school boards free ofcharge afterwards. The second track was asimple increase in the regular subsidy systemthrough AGIOn.

ComplexityThe urgent need for new school infrastructureforced the Flemish government to find anappropriate solution with a number ofpreconditions:

•Accelerated elimination of the existing gap inschool infrastructure (short term).

•Optimal results with limited resources.•Creating employment in the construction

industry.•Creating modern school infrastructure.•Creating flexible and organic school

infrastructure.

•ESA 95 neutral.*

In a report on PPPs in Flanders, the BelgianCourt of Audit stated that in the start andpreparation stages, budget neutrality had beenemphasized more than societal, operationaland financial value added (Rekenhof, 2009).

The mandatory policy framework meantthat several elements of complexity were crucialfor further project structuring and the steeringand control instruments used.

Multi-actor complexity: Freedom of choice ineducation is a constitutional right in Belgium,shaping a particular educational landscapefeaturing three main educational networks (seetable 1).

The main source of complexity in the schoolinfrastructure project is this multi-actorcharacter (see table 2), which is furthercomplicated by the decentralized organizationof the educational landscape. The Flemishgovernment, as the initiator of the PPP project,is also a ‘multifaceted’ partner.

The DBFM company (SPV) ‘Schools oftomorrow’ is responsible for the execution ofthe programme. AG Real Estate and BNPParibas Fortis hold a majority share of 75%minus one share. The DBFM company entersinto contracts with the delegated developer AGReal Estate CopID (a subsidiary of AG RealEstate), the school boards and other privateparties involved (for example architects,contractors and urban planners).

Technical complexity: A major technical challengewas the diversity of individual school projects,which hampered standardization. Someprojects were large others were small; therewere technical and art schools with specificdemands; school buildings had to be built orrenovated; some schools were protected ascultural heritage etc. Many of the school projectswere too small scale for stand-alone PPPs dueto high transaction costs. So the Flemishgovernment opted for a bundled programme

*European Union member states are obliged toprepare national accounts to a common format asdefined in the European System of IntegratedEconomic Accounts (ESA 95). These accounts areprepared by national statistics offices and reportedto Eurostat. ESA 95 sets out how institutional unitsand PPPs are to be treated for the purposes of thesestatistical analyses, and whether or not PPP assetsshould be recorded or not as government assets witha corresponding public sector liability. When thepublic sector finances 50% or more of a PPP, anydebt in the PPP must be included in a government’sbalance sheet.

Dow

nloa

ded

by [

Uni

vers

ity o

f B

irm

ingh

am]

at 2

0:25

05

Oct

ober

201

4

PUBLIC MONEY & MANAGEMENT SEPTEMBER 2014

365

© 2014 CIPFA

of 211 projects with high diversity. Placing onehuge programme in the market for a publictender procedure increased the technicalcomplexity significantly.

The legislation and the internal diversity ofthe educational landscape added complexity.The financial situation was also different:community education was fully funded by thegovernment, while the subsidized networkshad to secure their own funding up to 30–40%of the investment value of the newinfrastructures.

Finally, the legal and financial structure ofthe project added complexity. A main challengewas to get the project off the government’sbalance sheet, while retaining some governmentcontrol and providing an extended governmentguarantee on the long-term loans (loweringoverall cost price). Yet, financing a DBFMprogramme with a total value of more than 1.5billion euro was very difficult, especially infinancially turbulent times. The legal andfinancial complexities of long-term PPPcontracting increased due to the ambitiousnature of the project and the lack of a proventrack record. Without much first-handexperience and expertise regarding DBFMprojects, the Flemish government opted for a‘big bang’.

Political complexity: this was closely related tomulti-actor complexity. The various

educational networks in the region are rootedin the ideological struggle of liberals andsocialists on the one hand, and Catholics on theother, about the role of the state in educationand the position of private education duringthe 19th and 20th centuries. Today, this struggleis pacified through a delicate balance betweenthe different networks and political partiesinvolved. Education is a politically importantissue and takes up almost 40% of the totalexpenditure of the Flemish government. Italso has a strong tradition of consultation withthe educational networks. Moreover, given thehigh cost of the DBFM programme, meant thatall political actors had to watch it closely. Politicalcomplexity was also increased by the societalurgency of the project.

PPP governanceThe actual governance of the PPP project showshow the complexities were managed in linewith the initial objectives of the programme.

Structuring the projectTypically, two main types of PPPs can bedistinguished (for example Edelenbos andKlijn, 2009). In the contractual model (inspiredby PFI in the UK), PPP is a turnkey project inwhich a private actor contracts to design, financeand construct a public sector project. Privatemaintenance and exploitation may also beincluded. In the participative model, public

Table 1. The educational landscape in Belgium.

Community education (GO !, 16.5% of pupils): Organized and fully funded by the Flemish government, with its own system ofschool infrastructure (separated from AGIOn).

Subsidized public education (8% of pupils): Organized by local and provincial governments. School infrastructure is subsidizedby the Flemish government via AGIOn. The subsidies are 60% for secondaryschools and 70% for primary schools.

Subsidized private education (75.5% of pupils): Organized by private initiatives, mostly Catholic schools, ranging from large tosmall organizing bodies and school boards. School infrastructure is subsidized inthe same way as subsidized public education.

Table 2. The different ‘faces’ of the Flemish government.

Flemish minister of education: Responsible for school infrastructure. The minister of finance and budget controlsbudgetary impact and the minister-president is competent for general PPP policy.

PMV: Independent government investment company, working with partners throughprivate funds and PPPs.

AGIOn: Public agency that subsidizes the purchase, construction and renovation of schoolsfor compulsory education and colleges, and ensures the co-ordination and facilitationof the DBFM programme.

School Invest: Created by AGIOn (50%) and PMV (50%) to invest in the DBFM company. It holdsa minority share of 25% plus one share in the DBFM company ‘Schools oftomorrow’.

Dow

nloa

ded

by [

Uni

vers

ity o

f B

irm

ingh

am]

at 2

0:25

05

Oct

ober

201

4

PUBLIC MONEY & MANAGEMENT SEPTEMBER 2014

366

© 2014 CIPFA

and private actors establish a joint company tothose ends. The Flemish hybrid model combinedelements of both (Van Gestel et al., 2011) witha separate and mixed SPV company to executethe programme and a strict DBFM frameworkagreement between the SPV and the Flemishgovernment, and separate DBM and Financecontracts between the SPV and other privatepartners. This hybrid model is quite novel, andhence it is an interesting case for an internationalaudience.

Although Steijn et al. (2011) argue thatmanagement matters more than organizationalform in creating added value, in this case thestructure was significant:

•The SPV was specialized in its core task, withschool boards focusing on teaching.

•The SPV made a long-term commitment toproduce sustainable buildings.

•The SPV co-ordinated the various partiesinvolved to speed up the delivery time.

•Purchasing procedures were pooled, leadingto bargaining power and reduced transactioncosts.

•Construction was co-ordinated by specialists.

Besides bundling small projects, the Flemishgovernment also opted for public participationin the SPV. To avoid having the project on thebalance sheet (i.e. to be ESA 95 neutral), theFlemish government opted for a minority stakeof 25% plus one share. This was to providesome protection according to company law (aveto power in decision-making) and to realizea financial return in the case of profit.

The Flemish government wanted privatefinancial partners with experience in real estateactivities and companies. This was because afinancial partner would lead to a more ‘classical’approach (easy access to financing and moreopportunities for smaller contractors anddevelopers) and because the financial partnerswould do the project management.

The project company makes schoolinfrastructure available through individualDBFM contracts with the school boards. AGIOnpays part of the availability fees (following theexisting subsidy rates in the regular system),while the school boards pay the rest. Theadvantage for school boards is that they have astandardized contract, and therefore noadditional costs for legal advice.

The structure responds to some elementsof complexity but some actors, like the FlemishPPP Knowledge Centre, warned of potentialchallenges:

•Is a large programme preferable to smallerclusters?

•Are consortiums based on financial institutionsthe most appropriate private partners forrealizing school infrastructure?

•Are deviations from international norms wisewhen first-hand experience and expertise ismissing?

Public–public stage: processIn 2004, the educational networks were askedto respond to the plans. Their main concernswere the ownership structure, distribution ofresources across the networks, additional costsof alternative financing, critical mass of projects,and difficulties in ex ante specification of theexisting needs. After this consultation, feedbackto the education networks was limited. Despitethe decentralized educational landscape, thisproject was set up in a fairly centralized manner,as key players feared that an interactive processwith many stakeholders would lead to slow and‘sticky’ decision-making.

Because of the complexity and importanceof the project, the project structure waselaborated by a small group of experts: theFlemish minister of education and his cabinetand specialized law and financial firms. Therewas very little involvement of other actors likethe Flemish PPP Knowledge Centre or otherministers in the Flemish government.

The educational networks in generalconsidered transparency and communicationto be insufficient (see Siemiatycki, 2007; Reeves,2008). The subsidized private education sectorfeared that the uniqueness and specificity of itsnetwork—not being entirely subsidized—hadbeen neglected, and that this structure was notthe least expensive solution for their schoolboards. To build trust, the final selection of theprojects was done by a selection committeewith extensive field representation. This helpedto limit concerns about distribution of resourcesbetween the different networks.

Selection stageThe public tender procedure (a negotiatedprocedure with prior publication of a notice)was open to consortiums with a financialpartner. Candidates were expected to take therole of equity provider, to formulate a proposalwith respect to the overall financing, and tohave the necessary experience and expertiserelating to real estate development. Thecompetitive process took two years and therewere four candidates. In December 2008, theFlemish government selected Fortis as thepreferred candidate. Because the financial crisis

Dow

nloa

ded

by [

Uni

vers

ity o

f B

irm

ingh

am]

at 2

0:25

05

Oct

ober

201

4

PUBLIC MONEY & MANAGEMENT SEPTEMBER 2014

367

© 2014 CIPFA

in September 2008 had a tremendous impacton Fortis, the final negotiations were delayed.Fortis had to rely on other banks to finance theprogramme. To keep the project on track, inaddition to an already extended sub-sovereignguarantee scheme, the Flemish governmentprovided a refunding guarantee for the privatelender. While the main contract was closed inAugust 2009, the financial close took until June2010 (three-and-a-half years after the tenderwas published).

During the tendering procedure, theeducational networks and school boardsreceived very little information and mostlythrough informal channels. The DBFMframework agreement between the SPV andthe Flemish government was secret because ofconfidentiality issues (despite pressure to openup from the educational networks and somemembers of the Flemish parliament). The issueof commercial confidentiality hamperingtransparency and eroding public legitimacy ofPPPs is an important issue (see Siemiatycki,2007). Nevertheless, a number of provisionsrelating to risk sharing that will impact futuredevelopment were agreed at this stage. Oneissue is the allocation of volume risk—despitewanting the private partner to take this risk,the Flemish government eventually agreed toabsorb it. As a result, an important incentive forthe SPV to keep as many schools as possible onboard was eliminated.

Operational stageThe SPV became operational in 2010. Due tothe constitutional right to freedom of education,school boards could not be forced to participatein the DBFM programme. Their initialcommitment, however, was high because PPPpromised a faster delivery and they could keeptheir place on the regular subsidy waiting list.However, the ranking of many schools on thewaiting list improved during the years that thePPP was being set up, weakening the promiseof earlier delivery through PPP.

The original ambition to have 211 schoolprojects worth 1 billion euro was downsized in2010 to 167 school projects for a total of 1.5billion. Concerns about the costs of the DBFMprogramme were raised. For communityeducation (fully financed by the Flemishgovernment), the DBFM programme was zerorisk and even a welcome addition to the regularfunding.

Meanwhile, the pressure from thesubsidized education sector increased fromSeptember 2010 onwards, as the officialinvitation to join the DBFM project gave them

75 days to decide. Many school boards, however,did not participate:

•First, the subsidized private network calculatedthat the contribution (‘availability fee’) oftheir school boards would in some cases take80%, with peaks up to 120% of their operatingbudget, for a 30-year period. Completely‘unfeasible’ and ‘unaffordable’ was theirreaction. A similar problem was exposed byShaoul et al. (2008) in their analysis of theconstruction of British hospitals under PFI.

•Second, the delay to the start of DBFM meantthat a number of selected projects wereconstructed in the regular system in theperiod 2007–2010.

The Flemish government then decided toprovide the subsidized education sector withan increase of 11.5% in subsidies. The schoolboards remained wary, lacking both experienceand expertise. They had to interact with aspecialized SPV with experts who understoodall the details of the DBFM agreement. Neitherthe networks nor the school boards had accessto the DBFM framework agreement betweenthe Flemish government and the SPV, makingthem dependent on secondary sources tounderstand the regulatory context of thesetransactions. The networks claimed some criticalissues were not yet solved (for example thenecessary input of their own resources;accelerated repayment; third party use of futureschool infrastructure).

These uncertainties forced the SPV toensure that no school board would be deletedfrom the portfolio because it overran thedeadline. By the end of 2010, it became clearthat the quota for the subsidized privateeducation part for the portfolio was not goingto be met. In accordance with the DBFMframework agreement, a new call was launchedand in July 2011 the quota was reached.

Mid 2012, the DBFM company signed 167pre-contracts involving at least 200 schools:108 for subsidized private education, 28 forsubsidized public education and 31 forcommunity education. The project was finallyon track; the end date for delivering all projectswas moved to 2017, and construction stagebegan in late 2012.

PerformanceEvaluating PPP performance is challenging,given the different criteria of success—Hodgeand Greve (2013) list 18 of them. In this paperwe focused on the original goals set out by theFlemish government in 2005 for the ‘Schools of

Dow

nloa

ded

by [

Uni

vers

ity o

f B

irm

ingh

am]

at 2

0:25

05

Oct

ober

201

4

PUBLIC MONEY & MANAGEMENT SEPTEMBER 2014

368

© 2014 CIPFA

tomorrow’ project and investigated whether ornot thy have been met. Table 3 lists these goalsand to what extent they have been met.

ConclusionsThis paper contributes to the PPP researchliterature by presenting an analytical frameworkto evaluate PPP performance and by applyingit to a relevant case. The Flemish schoolinfrastructure DBFM programme offers anexample of how complexity and governance ofPPPs affects overall performance,demonstrating what can happen when acomplex solution is chosen for a complexproblem in a worsening external environment(the financial crisis). Although evaluating PPPperformance is never easy and many goals areinvolved, it is interesting to run through the

preliminary results (see table 3). The overallpicture is somewhat disappointing. It isdefinitely an achievement that in such hardfinancial times the DBFM programme did notfail altogether, but the high expectations havenot so far been met. Some important lessonscan be learned.

First, budget neutrality should not be theprimary reason for choosing DBFM. TheFlemish government initially showed interestin PPPs to keep necessary investments off theirbalance sheet. In response to a report by theCourt of Audit, the Flemish governmentemphasized added value as the main driverbehind PPP policy through introducing ‘addedvalue tests’. This confirms international PPPresearch findings that an exclusive focus onbudget neutrality will produce suboptimal

Table 3. Performance of ‘Schools of tomorrow’.

School boards will be able to focus on the provision of education: The detailed, formalistic character of the DBFM, with a financialfocus, requires diligent action and a structured monitoring system fromthe school boards, in order to avoid compromising their liability and tosafeguard their rights. To exploit the theoretical benefits of the DBFMscheme, they still have an important task in the initial stages.

The SPV will produce buildings that are sustainable: Early results are promising. Innovative designs have been produced forsustainable buildings. The SLAs (service level agreements) push forimproved performance and higher quality in comparison to the currentsituation, and this makes it difficult to compare the maintenancecomponent.

Faster delivery time: In 2006, it was expected that all schools within the project would bedelivered by 2011. In early 2012, this forecast changed to 2017. Theproject is therefore going to take a long time to realize—11 years (2006–2017).

Purchasing procedures will be pooled, which will reducetransaction costs: The SPV has carried out a tender procedure in pursuit of subcontractors

for different packages of individual projects and joint purchases. Forthe impact on transaction costs an ex post evaluation will be necessary.

The specialized construction co-ordination will be conducted byspecialized personnel in the SPV: The delegated developer, AG Real Estate CopID, has a team of around

50 specialists.

The projects would be performed faster than if the schoolboards had to provide construction or renovation by themselves: Not verifiable.

The programme makes a contribution to maximal results with limited resources: Uncertain. While this kind of large investment could not be made within

the regular budget (it is an extra on top of the regular budget), it isprobably a more expensive way of building new school infrastructure.

The creation of an additional incentive for employment and theconstruction industry: No information available at this time.

The creation of modern and appropriate school infrastructure: It looks like this objective will be achieved, but, of course, it might alsohave been achieved in a standard public procurement procedure.

The creation of a flexible and organic school infrastructure: No information available at this time.

ESA 95 neutral: Uncertain. ESA 95 neutrality may be compromised due to governmentguarantees.

Dow

nloa

ded

by [

Uni

vers

ity o

f B

irm

ingh

am]

at 2

0:25

05

Oct

ober

201

4

PUBLIC MONEY & MANAGEMENT SEPTEMBER 2014

369

© 2014 CIPFA

outcomes (for example Reeves and Ryan, 2007;Acerete et al., 2009; Shaoul et al., 2011).

Moreover, too much emphasis on theabsolute necessity of private financing candistract from other benefits of a PPP project,and thereby limit new and creative ways ofcollaboration/exchange between public andprivate partners (see McQuaid and Scherrer,2010). This change would probably lead to amore moderate and reasoned usage of the PPPmethod, demonstrated by the Danish case (seePetersen, 2010).

Second, when confronted with a complexproject, it is probably less risky to opt for acautious, incremental approach, with a simplegovernance structure. International experienceshould be taken into account. The Flemishgovernment increased complexity by choosingboth a bundled programme and a novel, hybridgovernance structure. On the one hand, thereare significant risks in opting for a ‘big bang’bundled programme, as it is more difficult toco-ordinate and manage. On the other hand,innovative hybrid PPP structures are interestingfrom a theoretical perspective, but in realitycan lead to a long and difficult implementationprocess—especially in a market that is risk-averse and where investors are looking forstructures they understand. Despite reasonableand well-intended arguments for this particularstructure, it was probably needlessly difficult.Because Flanders was relatively late developinga PPP policy, it could have relied more oninternational best practice and tested/competitive models. Although Steijn et al. (2011)claim that organization form is subordinate tomanagement in PPP performance, our casestudy has highlighted the importance of projectstructuring.

Third, the case study’s centralized andisolated decision-making structure with asmall group of experts, clashed with thedecentralized educational landscape inFlanders and resulted in the clients(educational networks and school boards)not entirely trusting the providers (SPV)and the programme. The minister ofeducation and his cabinet, supported byspecialized consultants, structured theproject without much cross-departmentalexpertise exchange and learning, andwithout much input from the ‘educationalfield’. This confirms international research(for example Fischbacher and Beaumont, 2003;Siemiatycki, 2007; Reeves, 2008) that a lack ofmeaningful consultation and insufficienttransparency towards stakeholders can bedetrimental for PPP performance.

ReferencesAcerete, B., Shaoul, J. and Stafford, A. (2009),

Taking its toll: the private financing of roads inSpain. Public Money & Management, 29, 1, pp.19–26.

Bloomfield, P. (2006), The challenging businessof long-term public–private partnerships:reflections on local experience. PublicAdministration Review, 66, 3, pp. 400–411.

Edelenbos, J. and Klijn, E. H. (2009), Projectversus process management in public–privatepartnership: relation between managementstyle and outcomes. International PublicManagement Journal, 12, 3, pp. 310–331.

Eisenhardt, K. and Graebner, M. (2007), Theorybuilding from cases: opportunities andchallenges. Academy of Management Journal, 50,1, pp. 25–32.

Fischbacher, M. and Beaumont, P. B. (2003),PFI, public–private partnerships and theneglected importance of process: stakeholdersand the employment dimension. Public Money& Management, 23, 3, pp. 171–176.

Grimsey, D. and Lewis, M. K. (2007), PublicPrivate Partnerships: The Worldwide Revolution inInfrastructure Provision and Project Finance(Edward Elgar, Cheltenham).

Hodge, G., Greve, C. and Boardman, A. E.(2010), Introduction: the PPP phenomenonand its evaluation. In Hodge, G. et al. (Eds),International Handbook on Public–privatePartnerships (Edward Elgar, Cheltenham).

Hodge, G. and Greve, C. (2013), Introduction:Public–private partnership in turbulent times.In Hodge, G. and Greve, C. (Eds), RethinkingPublic–Private Partnerships: Strategies forTurbulent Times (Routledge, London).

Jeffares, S., Sullivan, H. and Bovaird, T. (2013),Beyond the contract: the challenge of evaluatingthe performance(s) of public–privatepartnerships. In Hodge, G. and Greve, C.(Eds), ibid.

Klijn, E.-H. and Teisman, G. (2003),Institutional and strategic barriers to public–private partnership: an analysis of Dutchcases. Public Money & Management, 23, 3, pp.137–146.

McQuaid, R. W. and Scherrer, W. (2010),Changing reasons for public–privatepartnerships (PPPs). Public Money &Management, 30, 1, pp. 27–34.

OECD (2008), Public–Private Partnerships: InPursuit of Risk Sharing and Value For Money(Paris).

Petersen, O. H. (2010), Regulation of public–private partnerships: the Danish case. PublicMoney & Management, 30, 3, pp. 175–182.

Reeves, E. (2008), The practice of contracting in

Dow

nloa

ded

by [

Uni

vers

ity o

f B

irm

ingh

am]

at 2

0:25

05

Oct

ober

201

4

PUBLIC MONEY & MANAGEMENT SEPTEMBER 2014

370

© 2014 CIPFA

public private partnerships: transaction costsand relational contracting in the Irish schoolssector. Public Administration, 86, 4, pp. 969–986.

Reeves, E. and Ryan, J. (2007), Piloting public–private partnerships: expensive lessons formIreland’s schools’ sector. Public Money &Management, 27, 5, pp. 331–338.

Rekenhof (2009), Publiek–private samenwerking bijde Vlaamse overheid (Brussels).

Shaoul, J., Stafford, A. and Stapleton, P. (2008),The cost of using private finance to build,finance and operate hospitals. Public Money &Management, 28, 2, pp. 101–108.

Shaoul, J., Stafford, A. and Stapleton, P. (2011),Private finance: bridging the gap for the UK’sDartford and Skye bridges? Public Money &Management, 31, 1, pp. 51–58.

Siemiatycki, M. (2007), What’s the secret?Confidentiality in planning infrastructure usingPPPs. Journal of the American Planning Association,

73, 4, pp. 388–403.Skelcher, C. (2010), Governing partnerships. In

Hodge, G. et al., op. cit.Skelcher, C. and Sullivan, H. (2008), Theory-

driven approaches to analyzing collaborativeperformance. Public Management Review, 10, 6,pp. 751–777.

Steijn, B., Klijn, E.-H. and Edelenbos, J. (2011),Public private partnerships: added value byorganizational form or management? PublicAdministration, 89, 4, pp. 1235–1252.

Van Gestel, K., Voets, J. and Verhoest, K. (2011),Pijlers voor een performante samenwerking.Handreiking voor de PPS-praktijk op basis van vijfVlaamse PPS projecten (SBOV, Leuven).

Voets, J., Van Dooren, W. and De Rynck, F.(2008), A framework for assessing theperformance of policy networks. PublicManagement Review, 10, 6, pp. 773–790.

Yin, R. K. 2009. Case Study Research: Design andMethods (Sage, Thousand Oaks).

Dow

nloa

ded

by [

Uni

vers

ity o

f B

irm

ingh

am]

at 2

0:25

05

Oct

ober

201

4