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New approaches to commissioning through consortium working

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).

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New approaches to commissioning through consortium working

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  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 (Smaller Supplier..Better Value?, OGC & Small Business Service, 2002)

  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 (White Paper, Localism Bill etc) • 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 Provider Provision 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 Provider Provider Provider Provider Provider

  14. aka Formal Consortium Collaboration Spectrum Networks/ Loose consortia Formal consortia Mergers 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. £30m (case study at www.acevo.org.uk) • Viva (Eventus as a managing agent) • Established 2008/operational 2009 • 8 members (4 on the board) • £600k (case study at www.acevo.org.uk)

  20. 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

  21. 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

  22. Contract-Readiness Criteria • Financial health • Quality systems • Suitable organisational policies • Suitable governance • Technical capacity

  23. 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

  24. Challenges • ‘Procurement-readiness’ - meeting the PQQ thresholds (especially smaller providers) • QA and accountability • Measuring social return • Conflicts of interest – ensuring contestability

  25. Critical Success Factors • From culture of entitlement to culture of enterprise • Business skills and entrepreneurial acumen • Long-term vision • Tenacity

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