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Building a successful consortium

  1. 1. BUILDING A SUCCESSFUL CONSORTIUM 29 FEBRUARY 2016 Lev Pedro Neil Coulson
  2. 2. WELCOME
  3. 3. THIS WORKSHOP WILL COVER • Drivers for forming a consortium • 10 stages of consortium development • Consortium models • Risks and mitigation • Case studies • Q&A
  4. 4. DRIVERS
  5. 5. BARRIERS FOR SMALL ORGANISATIONS • Unable to find out about opportunities • The procurement process (e.g. complex, expensive) • Contracts are too big and/or broad • Pre-qualification • Lack of understanding of the requirements • Cashflow • Social value often not factored in
  6. 6. EXTERNAL Aggregation of contracts Competition Best value Whole person based approaches Innovation INTERNAL (SECTOR) Fragmented services Competition Patchy quality Lack of scale Tender capability/lack of capacity OPERATING ENVIRONMENT
  7. 7. DEVELOPMENT PROCESS
  8. 8. COLLABORATION SPECTRUM Network Partnership Joint venture Loose consortium Formal consortium Merger
  9. 9. 1. Sector scoping/gauging interest 2. Steering group 3. Start-up funding 4. 3Year Strategic/Business Plan 5. Membership Prospectus 6. Membership recruitment 7. Incorporation 8. Grant aid/investment finance for ‘baseline’ hub? 9. Win tenders 10. Deliver 10 STAGES OF DEVELOPMENT
  10. 10. CONSORTIUM MODELS
  11. 11. PROVIDER Contractor Provider Provision of Services
  12. 12. MANAGING AGENT Contractor Managing Agent Sub-contractors Provision of Services
  13. 13. MANAGING PROVIDER Contractor Managing Provider Provision of Services Sub-contractors Provision of Services
  14. 14. CASE STUDY: YOUTH CONSORTIUM SHEFFIELD • Loose consortium of c. 20 providers • Zest is managing provider • £2m of contracts for Positive Activities, TargetedYouth Support Services and work with NEETs
  15. 15. MANAGING AGENT/PROVIDER • Contract top slice • Percentage of contract to pay for management of sub-contractors’: • performance • quality • financial management
  16. 16. VERTICAL ALLIANCE Commissioner Managing Body FrontlineVCS Providers
  17. 17. ‘SUPER PROVIDER’ Provider Provider Provider Provider ProviderProvider
  18. 18. TERMINOLOGY Super Provider Formal Consortium SPV
  19. 19. HOW DOES IT WORK? • Incorporation to form new legal entity • Providers become members of the company • Hub and spokes operating model
  20. 20. HUB & SPOKES OPERATING STRUCTURE Support Unit Provider Provider Provider Provider
  21. 21. HORIZONTAL ALLIANCE Frontline VCS ‘Super Provider’ Commissioner
  22. 22. OWNERSHIP & MANAGEMENT STRUCTURE Board Member Hub Member
  23. 23. SOCIAL OWNERSHIP Owned and controlled by the members 2 tier governance: • Council of Members • Board
  24. 24. CASE STUDY: GREATER TOGETHER • CYP & Families consortium in Lancashire • Set up in 2011 - investment from LancashireChildren andYoung People’sTrust Board • Formal consortium established as charitable company • 2012 - won first contract - £750k to deliver targeted youth support services • 2013 - investment from Social Investment Business/second contract secured - £2.5m for Early Support services • 2014 - third contract secured - £1.5m for domestic abuse services
  25. 25. RISKS AND MITIGATION
  26. 26. CONSORTIUM DEVELOPMENT: RISKS 1. Lack of commissioner buy-in 2. Internal conflicts of interest 3. Lack of consortium member buy-in 4. Lack of start-up / working capital 5. Subcontractor / delivery failure 6. Unable to sustain hub
  27. 27. FURTHER INFORMATION Lev Pedro 020 7520 2411 lev.pedro@ncvo.org.uk Neil Coulson 020 7520 2411 neil.coulson123@btinternet.com
  28. 28. NCVO champions the voluntary sector and volunteer movement to create a better society. We connect, represent and support over 11,500 voluntary sector member organisations, from the smallest community groups to the largest charities. This helps our members and their millions of volunteers make the biggest difference to the causes they believe in. • Search for NCVO membership • Visit www.ncvo.org.uk/join • Email membership@ncvo.org.uk 2

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