A joint venture is a partnership in which public and private sector partners pool their assets, finance and expertise under joint management to deliver long-term growth in value for both partners. Such an agreement applies to a specific project for a specific length of time.

Purpose

Joint ventures can realise the potential of government assets, and spread the risk of delivering policy and commercial objectives. The public sector can be involved on an on-going basis as well as share in the financial benefits of the project.

Joint ventures can include contractual agreements, for example licences, profit and revenue sharing agreements, or formal corporate joint ventures with one or more public or private sector partners.

Success in a joint venture depends on thorough research as well as analysis of aims and objectives. These should then be incorporated into a written joint venture agreement. Trust is vital to successful joint ventures. Agreeing exact terms when you set up your joint venture will help to reduce risks and allow you to enter fully and confidently into the relationship.

Applications

There are two main types of joint venture. The most common is a ‘contractual joint venture’, where you can establish an agreement to co-operate, without setting up a separate business. For larger or more complex projects, an ‘incorporated joint venture’, where a separate business is set up to carry out a particular activity or project, may be better. Structures need to work commercially and be sufficiently solid to withstand public scrutiny.

Background research and further advice

HM Treasury, Public Private Partnerships: the Government’s Approach, 2000

Links to Case Studies

You can find the following relevant case studies within the toolkit:

• Swiss Cottage, Camden