MERGERS AND COLLABORATIONS FOR THIRD SECTOR INFRASTRUCTURE ORGANISATIONS

1. MERGERS AND COLLABORATIONS FOR THIRD SECTOR INFRASTRUCTURE ORGANISATIONS DAVE HOLLINGS, CMS GRAHAM WHALLEY, YOUNG LANCASHIRE 16 April 2013

2. THE ISSUES The ‘Age of Austerity’ is going to continue for several years Needs are growing and resources are shrinking Infrastructure organisations may be needed, but they are not priorities for funding The type of infrastructure networks that were possible in 2007 are not possible now How to make sure we fund the work not the overheads

3. THE DRIVERS • There is less money – you need to be able to do more for less • Commissioners want to commission from fewer organisations because it is cheaper • New sources of income or even new ways of accessing the same sources of income • Reducing costs and overheads • Transforming Local Infrastructure (One Lancashire) – this will not be repeated

4. COLLABORATIONS • Different forms:- • Lead partner as accountable body with other partners • Partnership • Formal consortium • Organisations retain their independence – their own boards, own staff, own culture • But they bid, purchase or share together • Voluntarily agree to work together in the same ways – in order to survive • Savings may be less than in merging

5. MERGERS Two or more organisations formally merge to become one organisation They serve (mostly) the same groups of beneficiaries and/or provide (mostly) the same sort of services Can be major savings – one chief officer, less admin, one office, merged systems A larger body can survive more hits Loss of independence, one size fits all Was there a good reason for separate infrastructure organisations? Does it just reflect local authority boundaries?

6. BARRIERS TO COLLABORATION AND MERGER Inertia ‘Some day my prince will come’ Culture of we spend what we are given, not we make savings where we can We must have a town centre office, so many admin staff, so many managers because ..... Big fish in a little pond Step this way to oblivion Rather go down with the ship, than lose control of the ship

7. WHEN TO COLLABORATE • Consider collaboration when:- • There is a real need for different organisations • But you do complementary work • You contract (some) services from the same commissioners • You can reduce costs for jointly buying, sharing or co-locating • You may be members of two or more collaborations for different things

8. Three types of collaboration • IncorporatedConsortium e.g. Co-operative consortia • Lead Partner-Sub Contractor • General Partnerships

9. But whatever option is pursued... Need to clearly identify own interests, expectations and commitment able to make (aka ‘due diligence’) Should document agreements (MoU, Articles, SLA, contracts, etc) Accept that the ‘end destination’ may not be what you start out to create...

10. Next steps • What is the purpose of the collaboration • Decide who is going to be part • The level of integration/ working together • Appropriate governance arrangements • Support from One Lancashire to facilitate these discussions and to draft appropriate documents

11. DAVE HOLLINGS, CMSGRAHAM WHALLEY, YOUNG LANCASHIRE 07967 815322 / 01772 556127 dave@cms.coop /grahamw@younglancashire.org.uk