Most UK towns and cities have declared a climate emergency or introduced net zero carbon plans. Many of these places have big ambitions around areas such as travel and energy use. Putting in place programmes with the right rigour and good governance can get towns and cities off to a great start, with the private sector often called in to deal with programme delivery and investment.

However, the way in which private-public sector partnerships currently work in the UK is still quite transactional in nature. There are good reasons for this: value for money is one such reason, integrity issues another.

But this transaction-based approach is not enough to meet today’s challenges. New forms of collaboration are needed to encourage the private investment in resources and finance to deliver the transformational longer-term change required. This requires forms of co-investment in which businesses have more than a financial stake in transformative projects: local leaders should be looking for businesses to deliver social value and sustainability benefits as well. 

Clear outcomes and objectives are central to achieving this. The focus has to be on outcomes rather than outputs, as is mainly the case today. A bridge design may aim to improve traffic flow or air quality. But payment is still based on the output – building the bridge – rather than it meeting the other outcomes that the city authorities want.

Changing this output-based mindset is crucial, and realigning incentives can help shift the focus. We need a different approach to balancing risks and rewards over longer periods than we are used to seeing. A new type of monitoring and evaluation should focus on the outcomes set at the start – outcomes that each member of the partnership should share and commit to.

A thriving, well-functioning urban area operating sustainably is good for government and for business. Finding new ways for the public and private sector to work together is the gateway to creating towns and cities that are better positioned to deliver healthier and more balanced environments for all. KPMG is working at the forefront of sustainable transformation of towns and cities, supporting multiple clients to secure Devolution deals and City Regional Sustainable Transport Settlement (CRSTS) funding, with combined public and private sector contributions extending into multi-£bn pots for long term portfolios of change and improvement.

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