Weihe (in Hodge, Greve and Boardman 2010, p.520) asserts that, in order to achieve VfM outcomes, co-operative relationships between partners must be established. Uncooperative working environments (Klijn and Teisman 2003) can lead to operational difficulties between partners. Therefore, partnerships should be based on establishing the 'right' working culture (Edwards, Bowen and Stewart 2005; National Audit Office 2009, p.55) that is beneficial to both partners; and then maintaining good relations over the life of the contract (Partnerships Victoria 2003, p.16; AECOM 2007, p.75).
Developing good working relationships between partners can decrease the amount of corrective action (e.g. abatement) that might otherwise be needed to improve contract management outcomes (Ernst & Young 2008, p.13). Their study points to a significant advantage in creating cohesive relations between the partners: building such relations may improve long-term prospects of partnership outcomes thus avoiding, where possible, 'restrictive' and 'mechanical' administrative practices that may rely too heavily on specific wording of contracts (2008, p.13) rather than trying to achieve better mutually agreed outcomes by engaging their opposite partner more effectively. This is important because the 'end goal' for PPPs is not cost reduction (i.e. simply abating for underperformance) - it is ensuring the private partner performs to the agreed standards under the contract (HM Treasury 2011, p.15) and that VfM is being delivered as expected.
The National Audit Office in the United Kingdom (2009, p.54) (UK) goes further in claiming that poor relationships and unsatisfactory performance go 'hand in hand'. For instance, that poorly motivated staff are less likely to strive to meet tightly scheduled milestones or Key Performance Indicators (KPIs) and may result in penalties or abatement being applied to service providers for failing to meet performance targets.
Importantly, public sector employees, including those who work in PPP projects are required, when engaged in commercial transactions, to adhere to public sector codes of conduct and applicable standards (e.g. finance legislation) and are accountable to government, i.e. Parliament and subject to examination by Auditors-General for their decisionmaking (E W Russell & Associates 2000, pp.80-81). Such expectations and accountabilities may constrain the use of informality and innovation in the development of good relationships between the PPP partners.