Workshop C: Profitable Partnerships in tough times

Mike Britch, Norse Group Managing Director

“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

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.”

Partnership versus Contract Contract

High reward/high risk Requires detailed

specification Can drive win/lose

behaviours Certainty of outcome but

change can be expensive

Partnership Lower risk/reward Flexibility Influence Speed

Profitable partnerships? Public/Private partnerships• Requirement for full OJEU process

Public/Public partnerships• Use of Teckal exemption

Common objectives

Valuing each other’s contribution

Knowing what success looks like

The partnership being greater than the sum of its parts

Ingredients for a successful partnership

Freedom to: Trade Innovate Generate profit Do things differently Experiment/get things

wrong Be successful!

Ingredients for a successful partnership

What can partnership offer? Financial return over and above initial

savings Vehicle for service transformation Flexibility Operational freedom:• expand skill base• capacity• commercial culture

To combine public service ethos with commercial andentrepreneurial 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

Profitable partnerships need . . .

Accountability and personal ownership

Commercial systems• HR• Finance• ICT

Sales Function

Awareness of importance of cash flow

Profitable partnerships need . . .

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

The Norse Group

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

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

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

Mike BritchManaging Director

Norse Group

01603 706100 mike.britch@nps.co.uk