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 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 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  : 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  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 Britch Managing Director Norse Group