As part of the PPP procurement model, governments can look to the private sector to provide knowledge and skills that lead to service innovation and technical know-how. This notion assumes that it is more efficient for government (at least initially) to purchase services from the private sector than to develop its own capabilities in-house (Arthur Andersen and Enterprise LSE 2000: p.33; Delmon 2011: p.16-17). Failure to transfer skills from the private partner to the public partner can result in the latter having to pay expensive fees to external advisers for longer than necessary and prevent the broadening of public sector knowledge that might otherwise be expected to drive down costs and increase skill levels over the long-term.
There are documented examples where governments that have been using PPP for well in excess of a decade have been heavily criticised for over-reliance upon private sector expertise and failing to manage skill transfers (UK Parliament 2011; Fitzgerald 2004: p.36). This includes project management (change management) skills. In Victoria for instance, an independent review conducted on infrastructure provided under Partnerships Victoria policy, which examined project economics and contract documentation, concluded that public sector project management skills were 'spread thinly' across Government and that it was imperative to focus upon developing its internal resources (Fitzgerald 2004: p.36). This type of failing could potentially have flow-on effects for operational matters e.g. poorly developed corporate governance structures that apply to the identification, management and review of risks, particularly those that, if realised, might have a substantial impact on achieving intended outcomes.