Tag: UK

Reflection by Luke Lisell, Professional Cohort MBA Class of 2018

Reflecting on the time that I spent in London while participating in the Privatization, Nationalization, and Public Private Partnerships study abroad course, I believe that I learned a great deal. Some of my previously held beliefs were reinforced by what I heard and saw on the trip, and overall, I found that conditions in the United Kingdom were different from my expectations based on our pre-trip studies. I was also pleasantly surprised by the high caliber of my fellow participants and the broad cross-section of backgrounds that they represented.  Never at a loss for words or questions, I thought our group engaged well with each presenter and I enjoyed the Q&A sessions because I felt that we collectively drove the discussions forward with strong multi-disciplinary insights. I departed the United States expecting to hear full throated endorsements of Private Finance Initiatives (PFIs) and Public Private Partnerships (PPPs) from a series of experts engaged in fully exploiting and leveraging their possibilities. What I found instead was a pragmatic group of advisors and practitioners worried about public perception and political backlash. These individuals struggled at times to find artful ways to talk about public-private collaborations following years of negative coverage of failed projects in the national press.

As for individual presenters, I felt that Lieutenant Colonel Edward Waite-Roberts was an effective speaker and that his brief was beneficial at the beginning of the schedule. I appreciated the fact that he allocated time to give us deep background information on current British politics, Brexit, and the fallout from the Grenfell housing complex fire. I had specifically followed the international press coverage of the Grenfell tower fire last year, and incorrectly assumed that the incident was a distant memory for most members of the British public.  What Lt. Col Wait-Robert’s expert analysis made me realize was that this remains a hot button topic and generally fit the narrative, in the press and in the minds of an outraged British public, of the two opposing forces battling for supremacy in a decades-long fight in post-privatization Britain. The first of these antagonists could be called the ‘greedy private sector’ consisting of business people who cut corners to ensure higher returns and the second character being public regulators frequently found to be falling down on the job and generally doing an inadequate job protecting public interests.  I felt like this was very important context as we started our investigations into Privatization and Public Private Partnerships in the United Kingdom.

I also felt that Lord Jim Knight was a particularly interesting and effective speaker, and the luncheon at Osteria was an agreeable and appropriate setting to have a candid discussion. Lord Knight spent considerable time describing Brexit from the perspective of a senior Labour party politician, while tangentially explaining British political and educational structures that he correctly assessed to be difficult material for Americans to fully grasp. I found it fascinating that he counted the excesses of the Thatcher government and its aggressive privatization policies as the impetus for him to enter local politics in the late 1980’s. Fast forward to the early 2000’s, Lord Knight served in Tony Blair’s cabinet, as an undersecretary in the MoD during the early years of the Global War on Terror, in a Labour government with a strong track record of foreign military interventions and PFI deals. My instincts, based on US politics, would be that Lord Knight’s left-leaning Labour politics would be much less hawkish and more pro-international trade.  What instead appears to be the case is that some members of his Labour party are the voices in British society that are pushing to roll back some past PPP and PFI deals that were cut during the early days of the Blair government as well as the re-nationalization of the rail system.  This was an excellent illustration for me that local politics matter immensely for any party interested in executing long-term infrastructure or service delivery contracts with foreign governments. It is worth the effort to understand the local political environment but even that is not a bulletproof strategy as political winds may shift over time as illustrated by the current Labour government reversing some of its previous policies.

A third presentation that I felt was excellent was “Team Swansea” consisting of Labour Member of Parliament (MP) Carolyn Harris representing Swansea East and Professor Simon Brooks representing Swansea School of Management at Swansea University. MP Harris, besides being a gifted, natural orator with a profound sense of humor, did a wonderful job describing a very different corner of the United Kingdom than what we had come to expect during our tours of London and the wealthy surrounding counties. She painted a visceral picture of a post-industrial corner of Wales that was struggling to catch up after globalization shifted jobs out of the region. She and professor Brooks touched on the politics of devolution, the process designed in the late 1990’s to decentralize Great Britain’s government and give more power to the three nations which, together with England, makeup the UK. It was only after discussions with “Team Swansea” and others that I began to realize just how London centric and centrally controlled the UK governance was in the past and remains by many economic measures to this day. Wales only recently begun benefiting from the devolution policies, whereby it 1) retains greater control of tax revenues generated on its lands and 2) the locally elected Welsh Assembly appropriates those funds. Both speakers made it clear however that due to the relatively small population and industrial tax base of the country, public coiffures are insufficient to fund all the activities of local government. My impression following “Team Swansea’s” presentation was that, despite a consensus nationally that PFI’s and PPP’s had fallen out of favor among Labour party leadership, there is still a need for public private partnerships and private financing in public projects in Swansea and other similarly affected municipalities. In a chicken and egg fashion, post-industrial corners of the UK are looking for investment in public infrastructure to attract knowledge workers, entrepreneurs, and the companies that will help them climb out of the economic doldrums and begin a virtuous cycle of investment. At present however, PPPs and PFIs or versions thereof appear to be one of the few vehicles available to these rural communities that lack sufficient internal means to self-finance critical infrastructure and services.

I think that Professor David Newbery’s lecture would have been even more beneficial at an earlier position on the schedule. I thought he did an excellent job outlining the history of privatization in the United Kingdom, providing some UK specific context to the entire Privatization and Public Private Partnership discussion, and explaining the British vision of privatizing and restructuring. He carefully walked us through a case study of the network utility privatization and the structural remedies that they emplaced to create competition where feasible, and regulation to mimic competition where not. This would’ve been good context to have going into our meeting with the Office of Rail and Road (ORR). The gentlemen at ORR did a marvelous job explaining the intricacies of their job and were more than generous with their time, but the entire discussion would’ve been more effective if we had previously sat through professor Newbery’s lecture.

During our time in Winchester City, while touring the grounds of the beautiful Winchester Cathedral and the 13th century “public” school located within the constellation of outlying buildings, Lieutenant Colonel Edward Waite-Roberts said something that struck me. He commented that, “Just when you think you begin to understand this country, it will surprise you.” He was referring to the English practice of using the term “public” school to refer to the nation’s oldest, most prestigious, expensive, and exclusive learning institutions. I believe that a larger argument could be made, however regarding Britain and the United States’ understanding of each other. While the two countries appear to have very similar cultures with a long-shared history, there remains a significant gulf of understanding separating the two nations and their people. In my humble opinion, it was very helpful and beneficial to spend time touring and speaking with British advisors and practitioners of Privatization, Nationalization, and Public Private Partnerships to bridge this gap, albeit in a very specific quarter. As I mentioned in the intro, some of my previously held beliefs were reinforced by what I heard and saw, but overall, I found that conditions in the United Kingdom were quite different than what I had expected to find based on our pre-trip studies and my personal pre-formed ideas. My colleagues’ strong multi-disciplinary insights aided me immensely in breaking through some of these tricky cultural and historical distortions and ultimately, I would fully endorse this trip to any MBA student who had interest in public private collaboration.

Reflection by Alanna Williamson, MPH Class of 2019

As a health policy student with a strong interest in health care payment and delivery system reforms and cross-sector innovations designed to improve access to and quality of care while reducing costs, this course on Public Private Partnerships (PPPs) has been an invaluable addition to my graduate coursework. The perspectives shared by my classmates from the business and public policy schools were complementary to my own understanding of social funding opportunities and challenges from a public health policy lens. As one would expect, in the school of public health, my courses have focused on policy development, implementation and evaluation to achieve targeted public health outcomes. However, we do not go into as much depth about the pros and cons of various financing or organizational arrangements for social programs that have a direct impact on public health, including health care, housing, transportation, and public safety. Financing and organizational frameworks that achieve better “value for money” are of great interest to policymakers, funders, and private sector stakeholders, so it was extremely helpful to deepen my understanding of the strengths and weaknesses of public, private, and PPP organizational structures and financing arrangements from both a business and policy perspective.

Prior to visiting London, I was surprised to learn that I really had no idea what a PPP is. This term is used in the US constantly, but it is used to describe any project or program with both private and public-sector involvement. The benefit of these relationships seemed to be simply that public and private sector interests could be aligned to achieve a common goal. Through this course, I have learned that PPPs leverage private sector financing and efficiency to promote a public objective. The state can shift risk to the private sector and pay for performance based on predefined outcomes without investing a lot of up-front capital. PPPs can inject competition into a market to generate innovation and efficiency, but there are not as effective if the public sector subsidizes the program because this dilutes the incentives for private sector efficiency and competition.

I also learned that PPPs can be effective at the national, state or local level. It was interesting to hear about the UK trend toward devolution, as this mirrors the strong desire for states’ rights and autonomy in the US. In the health care sector, some of the most interesting and innovative value based payment arrangements are developing most rapidly at the state level in places like New York, California, Washington, Massachusetts and Montana. These states have the autonomy to incentivize health and wellness outcomes measures through innovative payment arrangements and delivery system reforms within the broad constraints of federal Medicaid policy. It seems that the UK has a similar urge to pass the authority to test innovative payment arrangements to more local levels of government through block grants or bundled payments in order to achieve better value for money. Since states in the US must balance their annual budgets, there may be more incentive to test PPPs at the state level in the US, particularly in business-friendly states with social problems that could be resolved in partnership with local private sector companies.

During our course in the US, we focused a lot on the opportunities of the PPP model to enhance public sector program quality and contain costs. However, there are very real downsides to this model that were made apparent on our visit to the UK. First, by fully shifting risk to the private sector, there is a real chance that operations will fail. We heard in class about a handful of examples, but in London, it did seem like this was a common occurrence. PPP contracts are written to ensure that a public service is delivered on time and on budget or the additional delay or costs are not paid for by the state. However, the failure of a private sector firm to deliver the public services promised, such as timely operation of commuter trains, ambulances, or defense, causes significant problems to the public and overall society. Simply not paying for the service if it is not delivered when needed does not seem to account for the negative effects that the disruption has on public safety, the economy, and public opinion of the privately operated public service.

While we did touch on this topic before the UK portion of the course, this point was driven home by hearing outrage from locals about the train system and my own experience of a train being cancelled. While I was refunded the full amount of my fare, this cancellation caused me to wait in the hot sun for a few hours and miss a portion of the London program. While I appreciated the financial compensation, what I really would have preferred is a reliable train that got me to London at the time scheduled. This experience led me to believe that the trains in the UK are unreliable overall, and I can understand the frustration that people would have if they rely on trains regularly. With so many failed P3s across sectors in recent years, I understood the public backlash against this model much more after being in the UK, as well as the recent reframing and focusing on infrastructure projects rather than services.

Finally, because of my interest in health policy, I spoke to many of the UK representatives and locals I met about the National Health Service (NHS). There was broad consensus from people across the political and economic spectrum that there is a need for significant reform related to financing the healthcare system to ensure sustainability and quality going forward. Some felt that increasing general taxes was the only way to go. Others focused on taxing corporations or closing tax loopholes, targeting firms like Amazon, to increase funds for the health system. A group of labor party protesters walked through the streets of Bath wishing happy birthday to the NHS and distributing pamphlets about the benefits of the system. They compared the amount of taxes being contributed to the UK health system per capita to German health care funding, stating that the UK was contributing much less and that this is the primary reason why quality is falling short. Others focused on immigration, stating that the NHS does not have the capacity to take care of all the new immigrants, and that this was the heart of the issue for them. One nurse I spoke with was convinced that the NHS would have to be dissolved, and was quite sad about it, but to her, this seemed inevitable. She said that she worked long hours and that her clinic was understaffed, but the main problem with capacity that she cited was that physicians were not compensated enough. It was interesting to hear the perspectives about funding and sustaining the national health care system in the UK, as many of the issues raised mirror the political and ideological stances of the US. However, in the UK, there seemed to be a stronger emphasis on fairness and rationality that is often missing from heated, emotional debates in the US. The concept of fairness seemed to pervade most policy discussions and it seemed like policymakers and lay people in the UK were grappling with how to solve these complex problems in a way that was fair to all citizens, including people of different income statuses and regions. Policy discussions also tended to be more forward-thinking, taking into account potential impacts on future generations. This standard for policy decision-making often seems lacking in the US where we are so often short-sighted and partisan in our policies.

In conclusion, the US and the UK are grappling with strikingly similar problems related to rising health care costs and constrained state budgets. It is useful to look to the UK for lessons learned and best practices related to PPP and other innovative funding models to improve quality and generate capital for public programs.

September 07, 2017

This post was submitted by Anna Wadhams, MBA ’18, during the Business & the State: Privatization & Public-Private Partnerships short-term study away program to England.

Before I reflect on my experience with the course, I would like to add some background on what drove me to pursue this program. I came into Business and the State with over ten years of experience in the public and nonprofit sector, specializing in outreach and advocacy in the environmental field. What I thought constituted “public private partnerships” drew from my personal experience working networks of government agencies, nonprofit partners, and corporate sponsors tackling environmental concerns. While I did oversee government contracts as a program manager, I did not have extensive expertise in P3s or compliance. As such, I wanted to know more about the theory behind privatization and how to create a successful P3 contract structure, as government agencies overseeing environmental concerns are continuing to be downsized and services outsourced to the private sector. While at some points I was a bit overwhelmed by the theory behind privatization and P3s, I’m thrilled to say this course and my experience in London has changed my life in ways I could never imagine, and has inspired me to think more broadly about what I wish to accomplish with my career.

Preparation for London      

Leading up to London, the course readings and presentations delved deeply into the theory of privatization, nationalization and P3s. I found the early readings to be quite dense, which may speak more to my lack of familiarity with the theoretical and technical aspects of privatization and nationalization. GW Professor John Forrer’s presentation, while interesting, left me feeling as though I needed take a separate beginners course solely on P3s and contracting in order to grasp the components P3/PFI contracts and how they provide value. While we were fortunate to have Ed Courtemanch from Amtrak present to the group, I wish we could’ve benefitted from his input before we traveled to London so I could compare his overview of rail services in the U.S. to Transport for London.

Getting My Bearings in Blighty

From a logistics standpoint, I found the flow of the week’s activities in London to be well executed. Our tour with Anne-Marie Walker on Sunday was a fantastic opportunity for the class to get to know each other while adjusting to our new surroundings and recovering from jet lag. The lodgings were in a supreme location and our site visits to Winchester and Cambridge were delightful breaks from the city. The theatre was a fantastic extracurricular activity. Group dynamics can make or break an experience like this, and I was fortunate to be in the company of eleven classmates who were open to sharing their unique skills and expertise in an effort to help me fully grasp course content. I believe I came away from this experience learning a great deal about my classmates both personally and professionally. I left each day grateful for the opportunity to participate in this program.

Speaker Impressions in the Wake of the Snap Election

My experience at Parliament was by far the highlight of the trip. It’s an understatement to say that our site visits to London fell at a very unique time in British politics, and I think the recent snap election results should be taken into consideration as we continue learning about the impacts of privatization on both business and society. Jeremy Corbyn’s Labour Party upset resulted in a hung parliament, but the ramifications were much more profound in application to our course. I wish I had more time to analyze Labour’s new manifesto, especially its commitment to nationalize multiple industries-a direct rebuke to previous neoliberal efforts to push privatization and P3s as solutions successful alternatives to previously ‘failing’ industries under state control. While our course readings on U.K. government efforts at reform through privatization were informative, I found listening to Sonia Klein, Strategist for CMS Global and Manzila Pola Uddin, Baroness Uddin, Privy Council (PC) an incredible opportunity to hear how Tory privatization efforts contributed to yet another surprising election result. Admittedly, both Klein and Uddin are Labour representatives, so their interpretations reflect specific political values, but I personally welcomed their contribution. I would especially like to thank the program for scheduling two speakers who are both political change makers and women of color. Their views and personal experiences in politics were welcome, and I’m grateful to GW for providing the platform for both women to add their insight into the human impact of many of these policies and reforms. This was highlighted in the conversation surrounding the Grenfell Towers tragedy, as the devastating fire highlighted longstanding social and political tensions around local councils outsourcing management of their public housing to private contractors through PFIs, and the now tragic impact on residents in estates like Grenfell.

My experience at Tullow Oil was another highlight. Our conversation with Sandy Stash, Executive Vice President - Safety, Operations, Engineering, and External Affairs for ‎Tullow, was engaging and informative. I walked away with a newfound appreciation for her background and work at Tullow. Coming from a background in environmental advocacy and engagement, I appreciated her candor in claiming some of Tullow’s more challenging issues are the “softer issues” including how experts in a technical field like engineering can engage will local constituents in the countries they wish to do business. As someone who has worked with communities impacted by mineral extraction, communication between stakeholders, government and private firms is a continued source of tension, and requires a level of empathy and patience that is hard to maintain. Stash affirmed that this focus on softer issues is especially important as Tullow emphasizes transparency in its payments, contracts and beneficial ownership. Stash also described Tullow’s mitigation process, which is more challenging onshore due to various social factors. Again, I appreciated her forthright reflections on her experience as a woman working as an engineer in the oil industry.

Advocating Nationalization to Business School Students - What Could Go Wrong?

I want to give a special shout out to Cat Hobbs and share how much I enjoyed the overview of her campaign We Own It. Presenting an organization dedicated to nationalizing industries to a group of American business school students was no small feat, but I found Hobbs’s personal story interesting, and her presentation spurred some lively debate I believe the group enjoyed. I particularly liked the informal nature and free flow of group discussion after her presentation. Hobbs comes from an advocacy background like me, and her presentation resonated with me is because I have found myself presenting similar content to representatives from both the public and private sector with varying degrees of success. I thought Hobbs was a good sport and look forward to checking on We Own It’s future efforts.

I’m still processing everything I’ve learned from my experience in London and the course as a whole. I returned to the U.S. with a new realization that I need to continue expanding my scope of reference by visiting other countries and learning more about their approach to cross sector collaboration.

My enduring impression of the study abroad visit to the United Kingdom (U.K.) is stepping into the whirlwind of Brexit, and feeling like our class lucked into this unexpected turn of events. It is rare that we get to step into history. The vote and the reaction to it could be felt everywhere and in all our activities, like an anxious overlay to everything we saw and did. There was a perplexed atmosphere that only deepened over our week there. I met a few pro-Brexiters and far more anti-Brexiters, and it was fascinating to observe the quarrels. I find myself wondering how different the trip would have been if Brexit had failed. Would it have been discussed at all? Would our speakers have touched on “what could have been” in their presentations, or let it be as a foregone conclusion run its course? We will never know.

It was also obvious in many of our sessions that the insecurity fostered by the Brexit vote was a real problem for our hosts, and the disrupted strategies it creates in the short-term (regulations, market uncertainties, political turmoil) are going to cause complications down the road. This sense of uncertainty was equally palpable on the Tube and in the pubs and restaurants, where a generation of Anglo-Europeans share concerns about the possible loss of mobility, upset plans and relationships, and a sense of bewilderment that their country rejected their point of view. I consider the visit to Parliament and House of Lords particularly memorable given the situation, and how the leadership of the Conservatives and Labour parties were imploding in tandem with our time there.

Beyond Brexit, this was also my first time employing the London Underground. My initial expectations of similarities to U.S. systems were lost to the reality that most Londoners rely on the public transportation far more than we do in the U.S. I was told by a new acquaintance that most Londoners could afford no other way to get around.

I was equally amazed at the sprawl of London. Some of my classmates and I were astonished on our trip back from Cambridge that what felt like entering London was in fact 15 miles from Regents Park. I suppose a city as old as London could never easily be retrofitted with highways, but the marked lack of infrastructure when compared to the U.S. was noticeable.

What I Learned in London

The Brexit quarrels colored much of the experience for me, but there were some solid lessons to be drawn from our presenters and speakers. The notion of “good value for money” applied to areas I did not expect in U.K. public sector, such as security and military spending. The embrace of privatization was expected but still a fascinating contrast to the more familiar U.S. approach where privatization is rare because many services and industries began as private entities.

My impression of public private relationships in the U.K. is that after 20 years the approach is accepted for new ventures, but privatization of existing public assets is contentious in some quarters. I felt there was a societal question of what should be public and what private. The rolling stock and infrastructure of the London Underground could be privatized, but not the Underground itself. Perhaps there is too much history and national pride in an asset such as this to hand over to private industry?

Contrast this notion with the gondola we saw in North Greenwich, which was conceived as a privately financed venture with sponsorship in return for branding rights. It plays a role in gentrification projects on both sides of the Thames. I think it an interesting, and in the long-term, probably successful venture that makes good use of public and private capabilities. My impression is the U.K. sees private enterprise in new ventures as an opportunity to capture market efficiencies and private investment, but is less certain with privatizing and handing over existing public assets to private ownership.

Impressions of Our Speakers

I appreciated the diversity of our speakers and their preparedness for our class. There was a lot of material presented in a short period of time, and while many of these points were topical to my team project, we suffered from a lack of context in some areas. I found Sir Devane’s presentation on the British Council’s soft power fascinating. However, the contrasts with Lt. Col. Waite-Robert’s presentation on U.K. military privatization were fascinating. You can outsource hard power but not soft.

My most favorable impressions were on Tuesday when we met with Cat Hobbes and KPMG. There was that contrast of a one-woman movement pressing against privatization, followed by the corporate finesse of KPMG and Dr. Murphy’s team of public-private partnership (P3) experts. I understood from my classmates that they found Ms. Hobbs’ presentation weak, but I thought she did very well driving her point on ownership of her country’s public assets. In many ways her position is the more conservative in the P3 argument (although I wonder if she would see it that way), a fact I think often lost because it rejects profit-driven performance.

Impressions of My Classmates

A week with spent in a small group participating in the same learning experience is a good opportunity to learn about each other. There was a good deal of discussion outside of our visits, particularly in regards to the speakers. The mix of public administration and government contracts experience provided interesting perspectives on the course material. Also of interest was the mix of government employees and private sector students, so when we discussed the rail presentations there were countervailing perspectives on topics such as economic development, utilities oversight and the role of the public sector in pricing.

Many of my classmates preferred the enjoyment of each other’s company instead of mixing. However I preferred making acquaintances with the locals. It provided a great deal of satisfying conversation and a few new contacts in London. The topics of Brexit and the U.S. presidential election were always the first topics discussed but there was also great interest on the part of the Londoners I met with regard to our class and purpose of visit. It all provided excellent perspective on the U.K. and its relationships with the U.S. and Europe, and I believe many of my classmates missed good opportunities to learn local points of view.

Impressions of the Class