workshop c: profitable partnerships in tough times mike britch, norse group managing director
TRANSCRIPT
Workshop C: Profitable Partnerships in tough times
Mike Britch, Norse Group Managing Director
“LAs must consider fundamental changes to the way in which services are provided.”“Partnership working between Councils and other local agencies is key to re-designing public services and to ensuring good outcomes at lowest cost.”Department for Communities and Local Government
Partnership
“An agreement in which parties agree to co-operate to advance their mutual interests.”
Contract
“An agreement entered into by two or more parties, each of whom intends to create one or more legal obligations between them.”
Partnership versus Contract Contract
High reward/high risk Requires detailed
specification Can drive win/lose
behaviours Certainty of outcome but
change can be expensive
Partnership Lower risk/reward Flexibility Influence Speed
Profitable partnerships? Public/Private partnerships• Requirement for full OJEU process
Public/Public partnerships• Use of Teckal exemption
Common objectives
Valuing each other’s contribution
Knowing what success looks like
The partnership being greater than the sum of its parts
Ingredients for a successful partnership
Freedom to: Trade Innovate Generate profit Do things differently Experiment/get things
wrong Be successful!
Ingredients for a successful partnership
What can partnership offer? Financial return over and above initial
savings Vehicle for service transformation Flexibility Operational freedom:• expand skill base• capacity• commercial culture
To combine public service ethos with commercial andentrepreneurial skills Commercial and dynamic leadership Cultural change by staff
• Career opportunities
• Business focus
• Client centric
Robust monitoring and reporting systems Built around service specifications and KPIs
Profitable partnerships need . . .
Accountability and personal ownership
Commercial systems• HR• Finance• ICT
Sales Function
Awareness of importance of cash flow
Profitable partnerships need . . .
Formed in 2002
Grew out of DSO/DLO and set up in response to CCT
Staff transferred to company
NCC single Shareholder
Board of Directors to ensure NCC strategic control
2002: Turnover = £47m
2012-13: Turnover = £250m
The Norse Group
The Norse Group Joint Venture Model Separate joint venture companies limited by shares – 19 in place
already Board of Directors• 2 senior Partner Authority nominated• 3 Norse Group
Shareholding split 80% Norse – 20% Partnering Authority Profits split 50-50 Norse Group takes commercial risk Equal Shareholder rights Shared vision and objectives
Via its partnerships, the Group has: responded to market failure• Care Homes• Affordable Housing• Contract failures – Connaught
created new opportunities• Energy management – CRC• Waste disposal
changed with the market• Free Schools• Academies
Driving value from partnership Doing the same things via a different
vehicle will not deliver a step change or profitability
Use the partnership to change the outcome in service delivery and client commissioning
Success can only come from growth. Service efficiencies will only go so far
