new approaches to commissioning through consortium working
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New approaches to commissioning through consortium working. Neil Coulson. 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). - PowerPoint PPT PresentationTRANSCRIPT
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New approaches to commissioning through
consortium working
Neil Coulson
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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)
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Barriers…cont
• Pre-qualification
• Understanding the requirements (anachronisms used, poorly worded specifications)
• Lack of feedback
• Cashflow (Smaller Supplier..Better Value?, OGC & Small Business Service, 2002)
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Consortia – overcoming barriers
• Scale
• Development of specialist tendering and contract management infrastructure
• Greater bargaining power
• Adding value at the frontline
• Building capacity
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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
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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
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Key Trends Part 3 (political reform)
• Big Society – shift from state to non-state provision (White Paper, Localism Bill etc)
• Personalisation
• Growth of voluntary sector consortia, management companies, special purpose vehicles
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Different Contracting Forms
• Provider
• Managing Agent
• Managing Provider
• ‘Super Provider’
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Provider
Contractor
Provider Provision of Services
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Managing Agent
Contractor
Managing Agent
Sub-contractors Provision of Services
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Managing Provider
Contractor
Managing Provider Provision of Services
Sub-contractors Provision of Services
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Managing Agent/ProviderContract top slice
Percentage of contract to pay formanagement of sub-contractors:
Performance Quality Financial management
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‘Super Provider’
Provider Provider
Provider Provider
Provider Provider
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aka Formal Consortium
Collaboration Spectrum
Networks/ Loose consortia Formal consortia Mergers
Partnerships
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How does it work?
• Incorporation to form new legal entity
• Providers become members of this company
• Hub and spokes operating model
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Hub & Spokes operating model
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Ownership & Management Structure
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Social ownership
• Owned and controlled by the members
• 2 tier governance:
Council of MembersBoard
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Examples
• VC TrainEstablished 2000/operational 2002120 membersc. £30m (case study at www.acevo.org.uk)
• Viva (Eventus as a managing agent)Established 2008/operational 20098 members (4 on the board)£600k (case study at www.acevo.org.uk)
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Here2Help (H2H)
• Coventry VCS Consortium
• ‘Pipelining’ as well as competitive tendering
• Involvement in all aspects of the commissioning cycle – co-design through to allocation of resources
• ‘Co-commissioning’ through collegiate board structure
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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
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Contract-Readiness Criteria
– Financial health– Quality systems– Suitable organisational policies– Suitable governance– Technical capacity
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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
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Challenges
• ‘Procurement-readiness’ - meeting the PQQ thresholds (especially smaller providers)
• QA and accountability
• Measuring social return
• Conflicts of interest – ensuring contestability
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Critical Success Factors
• From culture of entitlement to culture of enterprise
• Business skills and entrepreneurial acumen
• Long-term vision
• Tenacity