Workshop C : Profitable Partnerships in tough times Mike Britch, Norse Group Managing Director

1. Workshop C:Profitable Partnerships in tough times Mike Britch, Norse Group Managing Director

2. “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

3. 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.”

4. Partnership versus Contract • Partnership • Lower risk/reward • Flexibility • Influence • Speed • Contract • High reward/high risk • Requires detailed specification • Can drive win/lose behaviours • Certainty of outcome but change can be expensive

5. Profitable partnerships? • Public/Private partnerships • Requirement for full OJEU process • Public/Public partnerships • Use of Teckal exemption

6. Ingredients for a successful partnership • Common objectives • Valuing each other’s contribution • Knowing what success looks like • The partnership being greater than the sum of its parts

7. Ingredients for a successful partnership • Freedom to: • Trade • Innovate • Generate profit • Do things differently • Experiment/get things wrong • Be successful!

8. What can partnership offer? • Financial return over and above initial savings • Vehicle for service transformation • Flexibility • Operational freedom: • expand skill base • capacity • commercial culture

9. Profitable partnerships need . . . • To combine public service ethos with commercial and • entrepreneurial 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

10. Profitable partnerships need . . . • Accountability and personal ownership • Commercial systems • HR • Finance • ICT • Sales Function • Awareness of importance of cash flow

11. The Norse Group • 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

12. 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

13. 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

14. 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

15. Mike Britch • Managing Director • Norse Group • 01603 706100 • mike.britch@nps.co.uk