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What would you say if you were offered £60m worth of work a year, guaranteed for the next 10 years? And how about a client with zero chance of going bust that promises to work in a co-operative spirit rather than calling the lawyers at the first sign of a problem? No, this isn't just wishful thinking – it actually happened to Kier, the lucky contractor that, this April, formed Kier Sheffield in partnership with Sheffield council. The joint venture will receive £640m (allowing for inflation) worth of work during the next decade.

The deal will bring guaranteed work stretching beyond the time horizon of most business leaders and will help to bulk out Kier's forward order book – already praised as one of the company's greatest strengths by management guru Andrew Gay in his ºÃÉ«ÏÈÉúTV column (1 August, page 39). The bulk of the work is low-risk refurbishment and maintenance, mainly on social housing, so it provides the steady cash flow City investors love.

But this jackpot win is not limited to Kier. The government wants partnerships with local councils to spring up across the country. "Most local authorities are under tremendous pressure to do something like this," says Jed Turner of Sheffield council, who is the project officer for Kier Sheffield. partnering is seen as a way to push through the fundamental change that the government wants to impose on local authority procurement: a shift away from choosing the lowest bidder and towards awarding projects to the bidder offering the best value for money.

Peter Forrest, a director at Preston-based contractor Eric Wright, which recently completed a partnering scheme to build a primary school for Wigan council, says: "Local authorities have been brought up with lowest price, not best value, and it's hard for them to get their heads around the idea that you don't have an audit trail to prove best value as you do with lowest cost."

The difference is that when you're picking winners on a lowest-cost basis, you just have to show that you examined all the bids and went for the cheapest one. Best value is harder to demonstrate on paper. But, Forrest adds, it's easier to take such matters on trust when you're involved in a partnering arrangement.

One way the government is pressuring councils to change their ways is by awarding stars for efficiency and linking star status to funding. Like many councils, Sheffield is aiming to be awarded two-star status, which will make it eligible for more central government funding. In theory, a council can earn two-star status by doing building and maintenance work itself using in-house teams and traditional procurement methods. But, in practice, stars have been awarded for improving efficiency through joint ventures with the private sector.

Most local authorities are under tremendous pressure to do something like this

Jed Turner, project officer, Kier Sheffield

Willmott Dixon group communications manager Andy Geldard says: "There are set criteria for getting the two stars and some councils take the view that 'in order to get the two stars, we'd better get the private sector in – they've got the expertise'."

Willmott Dixon is also cashing in on the partnering trend. It has arrangements in place with councils in Barnsley and Colchester, and the former will hear in November if it has been awarded two-star status. "It makes a difference of tens of millions of pounds to a single council, so it's big bucks," says Geldard.

The big bucks involved also mean that it will mostly be large firms that benefit directly from the bonanza, since they have the resources to deal with a single job worth tens of millions of pounds every year. Turner at Sheffield council says: "It was quite obvious when we sent our prequalification questionnaire that it was only suitable for big contractors. There are lots of stringent tests that we have to do under European regulations covering economic capacity, so you're looking at 10 or 15 major firms."

But there is good news for those outside the bulge bracket. The government accepts that this kind of work inevitably goes to the major players, but they are pushing to make sure other firms get a look-in by acting as subcontractors.

"We're never going to stop large firms being the prime contractors, but I'd expect them to bring small and medium-sized enterprises into the supply chain," says Teresa Graham, deputy chairman of the government's Better Regulation Taskforce. The taskforce recently published a report on the procurement process, which recommended that large firms bidding for major partnership deals should, as part of the selection process, be required to demonstrate how much of the supply chain would be open to SMEs if they were to win the job.