Six out of 10 public sector leaders surveyed (60%) believe the trend will harm employee morale, while almost half (49%) fear key skills, abilities and knowledge will be lost from the public sector.
The report, Relationship Counselling, reveals concerns over the risks of greater private sector involvement, including potential damage to public service delivery. It also uncovers opposition and resentment towards the trend among public sector leaders.
The study is the result of research among 200 senior leaders involved in partnerships with private firms, from local government, healthcare, uniformed services and universities.
As the public sector grapples with dwindling budgets, the number of partnerships with the private sector is set to more than double, according to the study.
Just 17% of public sector organisations deliver more than 40% of services through partnerships, but public sector leaders expect this to reach 38% in three years time.
And a significant number of leaders express doubts over their prospects for success.
More than two out of five (44%) do not believe that public-private partnerships will deliver value for money, whilst close to two in five (37%) lack confidence that public-private sector partnerships will succeed in delivering objectives.
Almost half (44%) believe that increased public-private collaboration will damage the quality of service delivery.
A majority (54%) are worried that public sector reform will cause changes to public service delivery that cannot be reversed. The same proportion fear that control is being lost over public services as more are outsourced to the private sector.
Just over a third of senior public sector managers (37%) express opposition to collaboration with the private sector. Nearly half refute that private firms can, or will, run public services more efficiently (45%) or deliver better quality services (49%) than the public sector.
Over half object to assumptions that private firms are more efficient (55%) and more effective (57%) at delivering public services.
Phil Kenmore, director of public sector consulting at Hay Group, said: "Public-private collaboration presents a key opportunity for the public sector to offset dwindling budgets in a climate of government spending austerity.
"A legacy of less successful partnerships has left public sector leaders with low expectations of working with private companies. However, partnerships can drive positive results when based on mutually agreed goals and aimed at achieving desirable outcomes for both parties.
"Lingering suspicions can be a critical barrier to successful collaboration. It is vital to establish common ground and identify differences at the outset to overcome this."
