NEWS FOCUS: There is nothing wrong with public-private partnerships in principle, but there is a lot wrong with them in practice. So says the IPPR commission's 'subtle'final report. So where to now, wonders Tash Shifrin

The great and the good have deliberated for 18 months, and at last the Institute for Public Policy Research commission has given its verdict on public-private partnerships.

Reports of a leaked draft of its findings in May suggested that it contained recommendations to privatise swathes of public services, including health. This provoked outrage, particularly as the IPPR is a think-tank seen as being close to Downing Street.

IPPR chief executive Matthew Taylor said then that he felt betrayed by the leak of what he claimed was actually a much more subtle report, with 'a strong assertion of the need to protect staff ' and 'brave things to say about the government's record' on PPPs.

'We think There is nothing wrong with partnerships in principle;

There is something wrong in practice, ' he told HSJ.

What the commissioners actually wanted was the middle ground: they both 'totally reject the privatisers' vision' and 'a public monopoly perspective'.

Their report suggests areas of healthcare where PPP could play a part, extending the private sector's role in the NHS. Some of them - regional pathology centres, intermediate care, treatment and diagnostic centres - will come as no surprise to NHS managers.

Managing primary care trusts, providing IT and administration and, possibly, providing trusts' health and community services are in there, too.

But there is criticism of the way PPPs - NHS private finance initiative schemes in particular - have worked out in practice. PFI is not 'offering significant gains' in hospitals, the report says. Nor has it brought modernisation. There is 'little hard evidence to suggest significant innovation resulting from the use of PFI'.

It knocks down the argument that PFI is 'the only game in town'.

The report says, 'PFI projects should not go ahead because a public authority believes there is no alternative', and warns against 'a mono-culture of procurement'.

The idea that using private finance allows the government to undertake more projects than would otherwise be the case is 'spurious', it argues.

In one measure likely to provoke anger from opponents of PFI, it suggests that 'restrictions on the inclusion of clinical and supportclinical services within PFI hospital projects should be removed'.

The government could find itself breaking pledges that clinical staff would not be subjected to PFI if it follows this line to the letter. But the commission cautions:

'There remain serious question marks over whether it would be desirable to implement a full-hospital PFI scheme in the UK at the present time. '

Having hit squads of private sector managers rescue 'failing' trusts is not seen as an option; rather it suggests drawing on both public and private sector skills to develop 'standing managerial capacity' to provide consultancy services.

These would work as 'partnership teams' under the aegis of the Modernisation Agency.

But if the commissioners have one overriding point to make, it is this: PPP should stand for 'pilot, pilot and pilot'.

The words 'pilot' and 'evidence base' come up again and again.

Asked whether the recommendations for increasing the role of the private sector in health hold up without piloting, IPPR researcher Rachel Lissauer, who worked with the commission, replies with one word: 'No. '

Piloting is 'the crucial theme of the report', she says. The suggestions about 'more flexible and ambitious' approaches to PFI are conditional on this. 'Until we have seen the impact of more flexible PPP arrangements, we can't make judgements on them. '

That applies to much of the government's short-term agenda, the report insists. 'The operation of diagnostic and treatment centres by public and private providers should be piloted using a range of approaches', while in intermediate care 'a number of pilot sites should be developed to establish models for local level concordats'.

The government might like to think about this before its talks on 'concordat 2' on long-term care go much further.

Ms Lissauer says there is a need to learn from mistakes: 'If partnerships are going to be used to contribute to better public services, they need substantial changes. '

One of the key elements of PFI schemes in the NHS is the separation of core and ancillary services.

This distinction is less common in prisons, for example, and the report describes it as 'highly problematic'. Ms Lissauer says: 'We are reluctant to accept some of the barriers there currently are. '

She puts a new spin on an argument often made by the antiprivatisation camp. 'You can't separate cleaning and catering from other functions as part of the overall service delivering improved care. '

There will be much for the government and health service managers to chew over. NHS Confederation chief executive Stephen Thornton says the NHS's needs are the same, 'whether It is private managers or public managers'. He lists managers' freedom to manage 'a small number of clear targets' rather than the current 'multiplicity of conflicting targets', 'learning how to take risks' and investment in management capacity and capability.

He also welcomes the emphasis on pilots. 'Absolutely, we must have that. '

But University College London's Professor Allyson Pollock, a leading opponent of PFI, says: 'The report hasn't considered the high cost of PFI, which has resulted in the downsizing of the NHS, service closures, bed closures and cuts in staffing. '

Future pilots are not enough for Professor Pollock: 'Why hasn't the government evaluated what it has done? It shouldn't contract out any more services until its evaluated existing schemes. '

But she adds: 'The report really suggests PFI hasn't shown value for money. That is welcome. '