Better Business Models Katharine Davidson Executive Director, Strategy & Management Information Efficiency and Reform Group, Cabinet Office 21 November 2011

What are better business models? HMG owned In House Outsourced Private owned Service contract Privatise Member owned HMG/Member owned HMG/Member/ JV owned Each model has pros and cons, but overall we are agnostic. Pragmatic judgement on merits, though understandably there’s interest in mutual principles

How do they support HMG Goals? Growth Deficit Reduction Transparency HMG Goals Efficiency and Reform Agenda Reform Efficiency Digital Open Public Services Better Business Models Aggregate Procurement Supplier Management Spend Controls

Employees External partner Mutual principles Taxpayers Greater engagement Ownership stake Freedom to innovate & improve citizen services Greater engagement Ownership stake Freedom to innovate & improve citizen services Opportunity to grow through provision of capital or expertise Better value Better service post-deal Ownership stake protects taxpayer Hedge poor initial contracts Better value Better service post-deal Ownership stake protects taxpayer Hedge poor initial contracts + Support SR reductions with at least 34% cost reduction + High quality services enabled by private sector investment of capital and expertise + Community benefit unlocked to ensure local people benefit + Performance Management rigour + Service & Incentive culture + Support SR reductions with at least 34% cost reduction + High quality services enabled by private sector investment of capital and expertise + Community benefit unlocked to ensure local people benefit + Performance Management rigour + Service & Incentive culture “Mutuals” offer attractive benefits:

Better Business Models Agnostic about types of models. Diversity of providers. Create new companies. Greater transparency. Efficiency Business Models must lower Costs Growth Create new companies Unlock barriers to growth Reform Approach with zero-base mentality Transformational Close Productivity Gap Better Business Models

Rallying Cry: Where Next? Our next steps for early 2012: Recruit head of Commercial team Complete Phase 1: MyCSP Develop Phase II pipeline with industry Create forum for pro-active industry engagement What can you do? Find out more at one of the breakout sessions today Develop specific ideas and share them with us Offer us frank feedback on the policy & execution

Better Business Models Katharine Davidson Executive Director, Strategy & Management Information Efficiency and Reform Group, Cabinet Office 21 November 2011