Shared Ambition, Separate Accountability: A Governance Health Check for Collaborative Public Bodies

Shared services are now a familiar feature of the UK public sector. Two councils create a joint waste service; a combined authority hosts a digital platform for several partners; NHS bodies and local authorities pool commissioning expertise. The financial and political case is usually straightforward. The legal case is often assembled later, through a memorandum of understanding, a service level agreement and an exchange of letters.

That can work while relationships are good. It is less reliable when a partner changes priorities, a service fails, or an auditor asks who was legally responsible for a decision. Collaborative arrangements do not remove accountability. They redistribute it, sometimes in ways that no partner intended.

Where shared arrangements create exposure

Public bodies act within statutory powers. They cannot simply agree to do whatever seems commercially sensible. A shared service must be anchored in vires, delegation and a clear legal model. The common models include a lead authority arrangement, a joint committee, a wholly owned company and a purely contractual collaboration. Each changes where decisions are made and who bears the legal consequences.

In a lead authority model, the host body often contracts with suppliers and recovers costs from partners. That can be efficient, but risk can leak if the contract imposes joint and several liability, if partners instruct the supplier directly, or if the service level agreement is silent on what happens when the host changes the service. A partner may believe it has purchased a defined service. Legally, it may have acquired a share of an open-ended obligation.

Allocating liability before it allocates itself

The starting point is to identify the legal person responsible for each obligation. Operational responsibility and legal liability are not the same. A partner may manage a workstream without accepting contractual liability for the supplier. Equally, a partner may fund a service without having authority to direct it.

Indemnities deserve particular attention. Public bodies should be cautious about uncapped indemnities, one-way indemnities and indemnities that extend beyond insurance cover. Where liability is shared, consider several liability rather than joint and several liability, set clear caps and exclude indirect and consequential loss. Surviving obligations should be defined and time-limited. If a partner is relying on another body to manage a risk, that reliance should be documented rather than assumed.

Decision-making that withstands scrutiny

Collaborative governance often fails at the point of decision. Terms of reference may say that a board agrees strategy, but not who decides in an emergency. A joint committee may have a quorum, but no clear reserved matters. Partners may sit on a board without checking that their own constitution permits them to delegate the relevant function.

Good governance requires a named decision-maker for each category of decision, clear officer delegations, documented conflicts of interest and a record of how partner bodies have approved the arrangement. Confidentiality and information-sharing provisions should be consistent with each body's access to information obligations. A decision that cannot be explained to a scrutiny committee or an auditor is a decision that carries avoidable risk.

Dispute resolution and exit planning

Dispute clauses are often drafted for a commercial relationship in which the parties can walk away. Shared services are different. The service may be statutory, vulnerable residents may depend on it, and the parties may have no realistic alternative provider. Escalation to chief executives, mediation and expert determination can be useful, but they should not stop service delivery. Any dispute process should preserve the right to seek urgent relief where necessary.

Exit planning is not an admission of failure. It is a test of whether the arrangement has been designed properly. The agreement should address transition assistance, data return, asset transfer, staff implications including TUPE and pensions, run-off cover and the clauses that survive termination. Exit should be rehearsed, not discovered.

A ten-point legal health check

1. Confirm the statutory basis and vires for each partner.
2. Identify the legal person responsible for every material obligation.
3. Check that liability is several, capped and insured where appropriate.
4. Document decision-making, delegation and reserved matters.
5. Test conflicts of interest and scrutiny arrangements.
6. Clarify financial contributions, VAT treatment and budget variation.
7. Align performance measures with enforceable remedies.
8. Address data protection, confidentiality and information sharing.
9. Include a practical dispute escalation and service continuity process.
10. Attach a funded exit and transition plan.

A legal health check should not be treated as an obstacle to collaboration. It is the mechanism by which collaboration becomes durable. Shared ambition works best when separate accountability is understood, documented and capable of being defended.