Public Private Partnerships for Improving Social Services: Towards Developing A Framework

Program Support Unit
Sindh Devolved Social Services Program
Finance Department
Government of Sindh

March 2004

A. Policy Orientation

In order to achieve development objectives, it is clear that all stakeholders need to be involved. This is necessary not only because such involvement can assist in better design, greater ownership and commitment but also add value when it comes to implementation. With this guiding principle, Governments all over the world now recognize and appreciate the need to enter into Public Private Partnerships (PPPs) with stakeholders to leverage their specific technical, administrative, financial or political powers. In Pakistan too, there has been a clear shift in conceptualization of the development activity and the days of considering the Government as the sole agency responsible for initiating, leading and delivering development programs and activities, are now slowly accommodating newer institutional arrangements, wherein different stakeholders are allowed room to contribute towards the overall effort to improve services for the public. This pace of accommodation and acceptance of such new institutional arrangements for service delivery is still quite slow, but the initial steps towards full-fledged PPPs have at least been taken. There is therefore a need to develop a framework that provides for the manner in which the role of PPPs in improving service delivery can be both enhanced and strengthened.

Community Based Organizations represents a most vital link in the value chain of devolved governance structure. The backward integration of this indigenous grass-root level organization with Taluka Municipal Administration, District Governments and Provincial Line Departments would result in true deepening of social services.

The Devolution Plan focuses on improvement in education, health and access to water and sanitation, and thus helps reduce poverty and gender imbalances. Desirable outcomes would be enhancement in school enrolment, wider coverage of health services and clean water and sanitation services. The key success factor in attainment of foregone objectives is improvement in governance and financing of social services that should in turn result in increased access to elementary social services. A common challenge that traverses through communities is under capacity in finance and governance that inhibits maximization of benefits through their social services.

Devolution would continue to fall short of its cherished objectives, if the Government alone was to bear the brunt of managing and leading all development activity. There is thus a need to engage community organizations and to give them adequate recognition and support. Community-based organizations (CBOs) can be made responsible for routine services, as has been shown in the education sector. The proximity of beneficiaries offers a major opportunity to improve transparency, quality, and accountability of services on a sustainable basis. Increased accountability is predicated on well initiated and self-managed CBOs, and other ancillary citizen oversight arrangements. The outcome of recently concluded studies under Sindh Structural Adjustment Credit favors expansion of social services through Public Private Partnership (PPP) and the private sector.

Devolution provides the opportunity to take bold steps toward community owned social services. The Sindh Local Government Ordinance supports greater involvement of community-based organizations (CBOs), non-government organizations (NGOs), and the private sector. SLGO rather formalizes the role of CCBs by providing for 25% of development expenditure through them. These have become important forces in social services expansion, and the transition provides a unique opportunity to develop partnerships. The proposed approach—flexible support to local governments to carry out their own agenda based on certain terms and conditions to ensure accountability and maximize benefits for the poor—reflects the major thrust that emerged from the participatory planning process undertaken.

B. Issues

Sustainability of services requires an overarching support and a sharp focus on development of local institutions to enhance services delivery based on the principles of partnership. SMCs need to be further institutionalized to operate schools, and expanded to include secondary schools. VDAs or private sector arrangements need to be developed to manage water schemes. SMCs and VDAs need capacity building to develop and implement plans and communities need to understand their role in supporting the SMC and VDAs in providing services. The health sector, by the nature of its business, is more complicated, but also offer opportunities to establish and strengthen patient associations and health boards, and gradually make health services more autonomous, self-sufficient, and accountable, and thus raise standards of health service delivery and mobilize other sources of financing.

However, the desire to increase the level of involvement of CBOs is hampered by the absence of adequate number of trained, organized CBOs at the grass roots levels. Not only is the number of active CBOs low, a number of them are not registered and most lack the requisite mechanisms of an organized set up. As a result, there is a tendency for concentration of work and resources amongst only a handful of large, mostly urban NGOs. This reality is at odds with our declared approach for attempting to widen the net of involvement with CBOs at the local level and poses a strong challenge to our desired implementation arrangements.

Perception amongst the government on capacity of CBOs, stems partly from lack of communication and partly because the CBOs are presented as an alternative to the government rather than as supplementary mechanisms. The problem is serious enough to warrant investments in capacity building initiatives aimed at improving the conceptualization of roles and responsibilities by the PLDs with longer institutional memory and at increasing understanding of social mobilization concepts as well as the use of alternative service delivery modes. Understandably an extended exposure to new participative structure over a period of time would entail better understanding of respective roles and responsibilities. Additionally a legal outfit e.g. one envisaged for SMCs, would sufficiently address their sustainability issues.

Notwithstanding some initial successes the comprehensive mainstreaming of communities is still a remote reality. To capture these developments, a favorable governance and financial environment is necessary, as well as local, hands-on capacity building. Indeed, given the political economy of Pakistan, the Government cannot be expected to operate social services effectively without strong community support.

C. The Role of the Private Sector

Too often, Public Private Partnerships (PPPs) tend to be viewed as a restricted concept in that they are perceived to be synonymous with Public-NGO Partnerships. The fact is however, that there is a clear and considerable role for the private sector as a whole—including the corporate sector, in improving service delivery. The PPPs thus need to be viewed from a broader perspective. Indeed, there are now a number of initiatives, including the UN Global Compact and the Business for MDGs initiative which recognize the importance of involving the corporate sector in helping governments achieve the MDGs and the DSSP is cognizant of these approaches and of the need to provide a role for corporate sector assistance in meeting the challenge of improving services at the local level. The concept of Corporate Social Responsibility appears to be fairly well recognized amongst Pakistani business community and there are already several examples of partnerships between Governments, NGOs and the corporate sector, especially in education and health, which highlight the many opportunities available for achieving synergy on common goals.

D. Media

The media helps keep the public informed and can shape public opinion and perspectives. If used judiciously and responsibly, the media can not only encapsulate and articulate the voice of the masses and act as a valuable instrument of accountability, but also provide the means of a constant dialogue between the public functionaries and the citizenry. In areas of dissemination of information, communication with clients and voicing concerns of the common man, soliciting feedback on performance of the local governments as well as a means of transparency of actions, there is clearly a role for the media under DSSP. Advocacy is central strategy in public private partnerships. Lifeblood of such strategy is embedded in its propagation through entities with a responsible position in that particular administrative matrix. Experience has established that such implementation strategies have a better follow through with visibility of stakeholders rather than an external support. Opportunities for performing this role would be provided to the media through various channels, such as stakeholder dialogue, involvement in preparation and implementation of Program communication strategy and by encouraging the media to assist in raising awareness about various critical issues, including those related to health and education. DSSP would play a pivotal role in imparting success to the media strategy.

E. Objectives of the Plan

a. To broadly outline the steps required for developing an enabling policy framework for PPPs
b. To outline the roles and responsibilities envisaged under the DSSP for stakeholders
c. To highlight issues regarding the implementation of PPPs

F. Implementation Strategy

The Government will establish simple guidelines, criteria, and procedures for the use of funds transferred to LGs and CBOs. These will include an agreement on the scope of activities to be supported, and procedures, for using funds (such as public announcement of available funds, annual accounts monitoring, approved annual plan and budget and possible matching grant). LGs will ensure that they will adopt the general guidelines and procedures for financial management prepared under the DSP for use in the social sector. GOVERNMENT will establish a system for verifying the registration and bookkeeping capacity of CBOs to determine this eligibility for transfer of grant-in-aid, and to actively seek to improve their capacity to make them eligible for support

Distribution of funds to CBOs will be based on yearly verification of their needs-based, transparent, and accountable use of funds. For this purpose, CBOs will need to meet certain basic requirements like having books of account that can be audited, and record of staff attendance and utilization. Funds allocated to CBOs may not be used or retained by LGs. Government will use the capacity building funds under the TA to build the capacity of CBOs, SMCs, health boards, and VDAs, to qualify them as recipients of GOVERNMENT financing to improve local social services. Qualifying organizations will eventually be allowed to operate their own services, including contracting of staff. Such community organization will also benefit other sectors and overall improve devolution and governance in the public sector. To be eligible for funding, these CBOs must be registered entities and sign a memorandum of understanding with the LG stipulating the terms and conditions of use of funds. SMCs will receive funding to improve basic school conditions. While in principle any eligible SMC can be supported, about two thirds of primary schools already receive Government funding. The Program will support expansion of all SMCs of schools up to grade 12, including kindergarten but not colleges. Support to SMCs will be based on the number of pupils in school rather than classrooms, so that shelter-less schools will also be supported. If the DG so desires, non-governmental schools may also be supported. SMCs will be allowed to hire teachers on contract basis, and assistant teachers for home schools and kindergarten. SMCs will be required to monitor the attendance of teachers and pupils. Eligible health boards, patients associations, or comparable CBOs will receive funding for specific health facilities to improve operation and maintenance, including procurement of equipment and supplies. To be eligible, health boards must be registered, use participatory planning processes, have at least two female members, and maintain proper financial records. HBs will be allowed to retain user fees and use the earnings for the facility. There should be clear advertisement of the fee structure and easy waiver arrangements. Examples of these arrangements are in place in Khairpur district, which serves as a model. VDAs and comparable CBOs will receive funding from TMAs to improve small water and sanitation schemes.

G. Next Steps

In order to implement this vision of Public-Private Partnerships (PPP) in Sindh helping local Governments to improve the coverage and quality of social services for the poor, a number of actions need to be taken, which have been summarized below. These actions will serve as the basis for the PPPs take-off and provide the minimum levels of effort and commitment that is required to allow PPPs to get a foothold and subsequently to flourish at the local Government level.

1. Developing Policy Framework
Although there is a clear focus of the Government on PPPs as enunciated in the SLGO as well as evidenced from its support to Sindh Education Foundation and SMCs in education and to VDAs in the water sector, and Farmers Organizations under Sindh Water Management Ordinance (SWMO-2002). However, there are some gaps such as in Health, where the concept and role of PPPs is either absent or unclear. There is thus a need to provide an umbrella policy framework for PPPs, where there is a need to develop the mechanisms for establishing CBOs, outline their structures, compositions, roles and responsibilities and to empower them along the lines of the SMCs. In addition, there is a need to develop a framework through which the SMCs, VDAs and Health Boards, can eventually become self-sustaining through collection and retention of user fees. This would impact the current modes of revenue collection at the service facility level and will involve further financial decentralization to enable such facility-specific collection and use of funds.

Actions:
i. Develop Health Board Policy
ii. Develop model of financial sustainability at facility level

Responsibility: PLDs, PSU

2. Supporting Institutional roles
Under the SLGO, the concept of CCBs was introduced, envisaging community involvement in development activity at the LG level. However, the CCBs have yet to take root in Sindh due to a number of reasons, including the lack of political buy-in, the slow community mobilization and the inability of communities to raise counterpart funds. However, there is a need to support the institutional role envisaged under the SLGO for community involvement through this mechanism by closely monitoring and analyzing the reasons for CCB inactivism and to work with the relevant LGs and in particular with the Community Development Departments in each District to mobilize communities. Similarly, the current role of the SMCs needs to be supported through expanding the scope of their financing and the work of the SEF as regards PPPs through specific programs such as Adopt a School, needs to be viewed as a model for replication not only within the education sector, but for the Health sector as well.

At the same time, it is important to track the financial support offered to such new institutional arrangements. The support for SMCs, CCBs, VDAs and for CBOs under DSSP would therefore need to be closely monitored to ensure that the financial support is as per plan.

Actions:
i. Reinforce role of SMCs in congruity with the SMC Act; as and when it is enforced
ii. Develop working paper for establishing Health Boards through articulation of the views of the community and other stakeholders
iii. Track financing of CBOs and PPPs through periodic review of funding

Responsibility: HD, ED, DGs, PSU

3. Initiate Capacity Building
In order to address the twin challenges of improving the perception of CBOs and to mobilize communities at the local level, there is a need for substantial investment in institutional capacity building. Furthermore, the objective of widening the net of CBOs for engagement at the local level means providing assistance and capacity building for small and frequently unorganized CBOs and grass roots organizations to reach a stage where they can register as legal entities and to thus become eligible for financing under DSSP. A formidable support to such initiative would come from the existing institutes.

At the same time, there is a need to work closely with the Nazims and Councilors to focus on ways in which the CBOs and the PPP framework can provide complementarities to their functions and supplement their efforts to provide better services to the public. In this respect, there is a need to organize various policy dialogues involving stakeholder discussions on the roles and responsibilities of each institution and how these can be organized in a way that support, rather than conflict with each other.

Actions:
i. Organize Training sessions aimed at improving understanding amongst stakeholders of the work done by each player
ii. Organize policy dialogues on PPPs as a means of poverty alleviation and improving social services
iii. Prepare Guidelines and Toolkits for stakeholders on PPP establishment, management and accountability

Responsibility: PSU, DGs, TMAs, PLDs

4. Develop Communication Tools
Some of the difficulties being faced in the implementation of PPPs emanate from the communication void that exists amongst stakeholders. There is thus a need to establish and use various regular, formal and informal modes and tools of communication to ensure transparency and knowledge management as part of an overall, broader development communication system. Development of instruments such as websites, programming content for electronic media, meetings, workshops, seminars, conferences, newsletters in regional and national languages etc. are envisaged as part of this effort to improve stakeholder communication. The role of the media can be quite crucial in this respect, as agents of dissemination and instruments of public accountability and would require working closely with them to improve public understanding of issues and to generate public debate on social service issues.

Actions:
i. Outline a Development Communication System for Sindh
ii. Develop specific instruments such as websites, content, organize meetings etc.
iii. Outline a plan for media engagement

Responsibilities: PSU, P&D, DGs, ID, ITD