building a successful consortium
TRANSCRIPT
BUILDING A SUCCESSFUL CONSORTIUM29 FEBRUARY 2016Lev PedroNeil Coulson
WELCOME
THIS WORKSHOP WILL COVER
• Drivers for forming a consortium• 10 stages of consortium development
• Consortium models • Risks and mitigation
• Case studies • Q&A
DRIVERS
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
EXTERNALAggregation of contracts Competition Best valueWhole person based approachesInnovation
INTERNAL (SECTOR)Fragmented servicesCompetitionPatchy qualityLack of scale Tender capability/lack of capacity
OPERATING ENVIRONMENT
DEVELOPMENT PROCESS
COLLABORATION SPECTRUM
Network Partnership
Joint venture Loose consortium
Formal consortiumMerger
1. Sector scoping/gauging interest
2. Steering group3. Start-up funding 4. 3 Year
Strategic/Business Plan
5. Membership Prospectus
6. Membership recruitment
7. Incorporation8. Grant
aid/investment finance for ‘baseline’ hub?
9. Win tenders10. Deliver
10 STAGES OF DEVELOPMENT
CONSORTIUM MODELS
PROVIDER
Contractor
Provider Provision of Services
MANAGING AGENT
Contractor
Managing Agent
Sub-contractors Provision of Services
MANAGING PROVIDER
Contractor
Managing Provider Provision of Services
Sub-contractors Provision of Services
CASE STUDY:YOUTH CONSORTIUM SHEFFIELD• Loose consortium of c. 20 providers• Zest is managing provider• £2m of contracts for Positive
Activities, Targeted Youth Support Services and work with NEETs
MANAGING AGENT/PROVIDER
• Contract top slice• Percentage of contract to pay for
management of sub-contractors’:• performance• quality• financial management
VERTICAL ALLIANCE
Commissioner
Managing Body
Frontline VCS Providers
‘SUPER PROVIDER’
Provider
Provider
Provider
Provider
ProviderProvider
TERMINOLOGY
Super Provider
Formal Consortium SPV
HOW DOES IT WORK?
• Incorporation to form new legal entity• Providers become members of the
company• Hub and spokes operating model
HUB & SPOKES OPERATING STRUCTURE
Support Unit
Provider
ProviderProvider
Provider
HORIZONTAL ALLIANCE
Frontline VCS ‘Super Provider’
Commissioner
OWNERSHIP & MANAGEMENT STRUCTURE
Board
Member Hub Membe
r
SOCIAL OWNERSHIP
Owned and controlled by the members
2 tier governance:• Council of Members• Board
CASE STUDY: GREATER TOGETHER
• CYP & Families consortium in Lancashire• Set up in 2011 - investment from Lancashire
Children and Young People’s Trust 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
RISKS AND MITIGATION
CONSORTIUM DEVELOPMENT: RISKS
1. Lack of commissioner buy-in2. Internal conflicts of interest3. Lack of consortium member buy-in4. Lack of start-up / working capital5. Subcontractor / delivery failure 6. Unable to sustain hub
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