New approaches to commissioning and delivering services through consortium working Dave Packwood

Why consortia? Barriers Facing Some Organisations The procurement process (long, complex, expensive at least £2,000 per bid) Unable to find out about opportunities Contracts are too big due to aggregation and 25% rule Frameworks (if too complex and too large) Competition from larger providers

Barriers…cont Pre-qualification Understanding the requirements (anachronisms used, poorly worded specifications) Lack of feedback from commissioners Cashflow Desire for one contractor Desire to shelter smaller groups

Consortia – overcoming barriers Scale Development of specialist tendering and contract management infrastructure Greater bargaining power Adding value at the frontline, clear social value Building capacity of smaller groups One point of contracting for commissioners Sticking to the knitting Reducing competition

Key Trends Deficit reduction The ‘more for less’ agenda – downward pressure on unit price focus on outcomes Reduction of ‘transaction costs’ often around 30% through aggregation (joint commissioning, bundling) -> devolved commissioning Localism Act (inc. Community Right to Challenge) Social Value Act Personalisation Growth of voluntary sector consortia in North West

First Thoughts What is the first thing you think about when someone talks about partnerships and collaboration What have been the major problems and issues that you have experienced.

Different Contracting Forms Provider Managing Agent Managing Provider ‘Super Provider’

Provider Contractor ProviderProvision of Services

Managing Agent Contractor Managing Agent Sub-contractors Provision of Services

Managing Provider Contractor Managing Provider Provision of Services Sub-contractors Provision of Services

‘Super Provider’ Provider

How does it work? Incorporation to form new legal entity Providers become members of this company Hub and spokes operating model

Hub & Spokes operating model

Ownership & Management Structure Associate Members

The Thirds Model In order to ensure openness and transparency the Board of Directors is structured using a principle of Thirds. Third Third Third Full members Associate members Independents

Follow up on Issues Have the systems and processes outlined helped to alleviate the issues and dangers previously identified Which still remain What would reduce these fears and issues for you

Examples Greater Together CYP & Families Consortium in Lancashire Set up in 2011 Formal consortium established as charitable company Won first contract - £750k to deliver targeted youth support services Successful in Community Right to Challenge with Lancashire County Council for a £3 Million tender for Domestic Abuse Services Successful in 6 of 9 Mini Competitions Early Support Core Offer Nov 2013 Knowsley Third Sector Consortium Working group set up December 2012, incorporated March 21 st 2013 Tendering for children and young peoples contracts - April 2013 Successful in bid for Young Carers October 2013 Successful in bid for Children who are missing and at risk of CSE November 2013 Successful in bid for Community Transport programme November 2013 Bidding for Emotional Health and Wellbeing tender December 2013

Processes Needed Ensure this what is wanted by the sector and commissioners Form Steering group to take it forward Seed corn/set up funding 3 Year Strategic/Business Plan, including core values, core offer, SWOT, competitor analysis, local context Membership Prospectus Membership recruitment and validation Incorporation and if appropriate charity registration Investment finance for ‘baseline’ hub? Submit and Win tenders Deliver

Challenges Fixed Management Fee 10%, reducing to 5% for larger tenders Only consortia Hub gets a mgt fee, providers have staffing plus model, working differently Need for agreed unit costs from disperate providers Forcing down of unit costs Initially lots of effort – not much funding Less of the pie but more pies This is not a lifeboat, or just a new way to get funding, it has to be a new way of working

Critical Success Factors Demand side Commissioner Commitment Commissioners’ Attitude to Change & Risk Market Opportunities

Critical Success Factors…cont Supply Side VCS Moving From culture of entitlement to culture of enterprise Leadership, business skills and entrepreneurial acumen Long-term vision, not short term gains Resilience

What other issues and questions emerge for you by about partnership and consortia