Branson relying on PPP intuition

We’ve heard a lot about PPP recently, and it’s had little to do with healthcare. Public/private partnership, as it is euphemistically known, has most memorably been centre-stage in the continuing spat between Ken Livingstone and Downing Street. The sub-text of Livingstone’s position is that PPP cannot be trusted: not when it involves the likes of Railtrack in the reconstruction of the dilapidated London Underground.

Railtrack is an all-too-easy target for politicians on the make. It symbolises – to the chairman of the Southall train crash inquiry, among others – all that is wrong with the privatisation of a public service. How can the railways adequately serve two masters at once – their shareholders and the public – without a critical conflict of interest developing?

But disaster-prone Railtrack is an extreme example. Surely there are plenty of others where private sector management, marketing and investment skills can be seen working effectively and harmoniously within a public service remit? Well, up to a point. The Dome, for example, might well have counted as a collaborative success – until its opening. But more recent stories filtering through, of an apoplectic Michael Grade and vitriolic Sam Chisholm, suggest experienced senior executives on New Millennium Experience Company’s board were driven to distraction by a civil service culture that was incapable of adapting to rapid change.

Most poignantly, however, private sector values are about to be tested in the forthcoming selection of a National Lottery licensee. Theoretically, the Lottery Commissioners have a relatively simple task: they must select which of the two major bids, by Camelot and Sir Richard Branson’s People’s Lottery, will be more productive for good causes in the next seven-year term. But it’s not that simple: the commissioners must also take account of public opinion, for the Lottery is no private enterprise, but a national institution.

Camelot may have performed pretty well as the first incumbent, but it comes to the judgment tribunal with a reputation to allay. True, it has been doing its level best to dispense with the past. It recently appointed a new chief executive untainted by the fat cats’ bonus scandal. It has slashed directors’ bonuses, halved its prospective claim on profits, promised a massively increased investment in technology and marketing, and even conducted a ‘warts and all’ social and ethical audit of its procedures to promote a new-found sense of social responsibility. Furthermore, it has fielded an impressive array of blue-chip partners, including the Post Office, NTL and Nokia.

Can it still lose? Ranged against anyone else but Branson, Camelot’s success would be virtually guaranteed. Branson has an enviable blend of skills. As a highly-successful businessman who also possesses the ‘common touch’, he has skilfully positioned the People’s Lottery as an altruistic public service, and himself as its disinterested steward. Intuitively, he perfectly understands what is required of PPP culture.

On the face of it, there are not many businessmen who do. Sir Alastair Morton, formerly of Eurotunnel and now heading the Shadow Strategic Rail Authority, is one of the few who fits the bill. The jury is still out on Greg Dyke, but he will be under great pressure to display PPP skills if he is to move the BBC successfully into the 21st century.

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