Strategic service-delivery partnerships (SSPs) are a new method of contracting for the delivery of local government services. They are rapidly becoming an important feature of local government in Britain. Negotiating and operating such partnerships successfully is a difficult challenge. They require the development and maintenance of a strongly cooperative relationship between the local authority and the strategic partner. This does not always work and there are examples where SSPs have been terminated. This article analyses SSPs in a transactions cost framework and identifies the contracting problems that can work against the success of SSPs and possible solutions to these problems provided by the development of trust. The likelihood of cooperation being based on trust can be signalled by the gifts both sides make during the procurement process in the form of negotiations, factfinding and preparation of the bid. However, procurement regulations may work to discourage a local authority from attaching a sufficiently high weighting to a factor as intangible as trust in the procurement decision.
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