1. New approaches to commissioning through consortium working Neil Coulson

2. Why consortia? Barriers Facing Small Organisations The procurement process (long, complex, expensive) Unable to find out about opportunities Contracts are too big Frameworks (if too complex and too large)

3. Barriers…cont Pre-qualification Understanding the requirements (anachronisms used, poorly worded specifications) Lack of feedback Cashflow

4. Consortia – overcoming barriers Scale Development of specialist tendering and contract management infrastructure Greater bargaining power Adding value at the frontline Building capacity

5. Key Trends Part 1 (deficit reduction and heightened competition) Deficit reduction New forms of private sector competition New forms of social economy competition through ‘externalisation’ of public sector human resources

6. Key Trends Part 2 (changing dynamics) Radically changing dynamics within the commissioning arena The ‘more for less’ agenda – downward pressure on unit price and greater focus on outcomes Reduction of ‘transaction costs’ through aggregation (joint commissioning, bundling) -> devolved commissioning

7. Key Trends Part 3 (political reform) Big Society – shift from state to non-state provision Modernising Commissioning Localism Act Social Value Act Personalisation -> Growth of voluntary sector consortia, management companies, special purpose vehicles

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

9. Provider Contractor ProviderProvision of Services

10. Managing Agent Contractor Managing Agent Sub-contractors Provision of Services

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

12. Managing Agent/Provider Contract top slice Percentage of contract to pay for management of sub-contractors:  Performance  Quality  Financial management

13. ‘Super Provider’ Provider

14. aka Formal Consortium Collaboration Spectrum Networks/ Loose consortia Formal consortiaMergers Partnerships

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

16. Hub & Spokes operating model

17. Ownership & Management Structure

18. Social ownership Owned and controlled by the members 2 tier governance:  Council of Members  Board

19. Examples VC Train  Established 2000/operational 2002  120 members  c. £40m Sheffield Well-Being Consortium  Established 2007/operational 2008  62 members  > £1m

20. Membership eligibility criteria Universal criteria –Sector (not-for-profit organisations and social enterprises) –Provision of services for the vulnerable and hard-to-reach –Area of operation –Commitment to consortium working –Commitment to sharing expertise (via a time bank)

21. Contract-Readiness Criteria –Financial health –Quality systems –Suitable organisational policies –Suitable governance –Technical capacity

22. Process Steering group Seed corn/set up funding 3 Year Strategic/Business Plan Membership Prospectus Membership recruitment Incorporation Grant aid/investment finance for ‘baseline’ hub? Win tenders Deliver

23. Challenges QA and accountability Measuring social return Conflicts of interest – ensuring contestability ‘Investment readiness’ (Investment & Contract Readiness Fund and Big Society Capital)

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

25. Critical Success Factors…cont Supply Side From culture of entitlement to culture of enterprise Leadership, business skills and entrepreneurial acumen Long-term vision Resilience