1. New approaches to commissioning through consortium working
Neil Coulson

2. Why consortia? Barriers Facing Small Organisations
The procurement process (long, complex, expensive)
Unable to find out about opportunities
Contracts are too big
Frameworks (if too complex and too large)

3. Barriers…cont Pre-qualification
Understanding the requirements (anachronisms used, poorly worded specifications)
Lack of feedback
Cashflow (Smaller Supplier..Better Value?, OGC & Small Business Service, 2002)

4. Consortia – overcoming barriers
Scale
Development of specialist tendering and contract management infrastructure
Greater bargaining power
Adding value at the frontline
Building capacity

5. Key Trends Part 1 (deficit reduction and heightened competition)
New forms of private sector competition
New forms of social economy competition through ‘externalisation’ of public sector human resources

6. Key Trends Part 2 (changing dynamics)
Radically changing dynamics within the commissioning arena
The ‘more for less’ agenda – downward pressure on unit price and greater focus on outcomes
Reduction of ‘transaction costs’ through aggregation (joint commissioning, bundling) -> devolved commissioning

7. Key Trends Part 3 (political reform)
Big Society – shift from state to non-state provision (White Paper, Localism Bill etc)
Personalisation
Growth of voluntary sector consortia, management companies, special purpose vehicles

8. Different Contracting Forms
Provider
Managing Agent
Managing Provider
‘Super Provider’

9. Provider
Contractor
Provider Provision of Services

10. Managing Agent Contractor Managing Agent
Sub-contractors Provision of Services

11. Managing Provider Contractor Managing Provider Provision of Services
Sub-contractors Provision of Services

12. Managing Agent/Provider
Contract top slice
Percentage of contract to pay for
management of sub-contractors:
Performance
Quality
Financial management

13. ‘Super Provider’
Provider

14. Collaboration Spectrum
aka Formal Consortium
Collaboration Spectrum
Networks/ Loose consortia Formal consortia Mergers
Partnerships

15. How does it work? Incorporation to form new legal entity
Providers become members of this company
Hub and spokes operating model

16. Hub & Spokes operating model

17. Ownership & Management Structure

18. Social ownership Owned and controlled by the members
2 tier governance:
Council of Members
Board

19. Examples VC Train Viva (Eventus as a managing agent)
Established 2000/operational 2002
120 members
c. £30m (case study at
Viva (Eventus as a managing agent)
Established 2008/operational 2009
8 members (4 on the board)
£600k (case study at

20. Here2Help (H2H) Coventry VCS Consortium
‘Pipelining’ as well as competitive tendering
Involvement in all aspects of the commissioning cycle – co-design through to allocation of resources
‘Co-commissioning’ through collegiate board structure

21. Membership eligibility criteria
Universal criteria
Sector (not-for-profit organisations and social enterprises)
Provision of services for the vulnerable and hard-to-reach
Area of operation
Commitment to consortium working
Commitment to sharing expertise via a time bank

22. Contract-Readiness Criteria
Financial health
Quality systems
Suitable organisational policies
Suitable governance
Technical capacity

23. Process Steering group Seed corn/set up funding
3 Year Strategic/Business Plan
Membership Prospectus
Membership recruitment
Incorporation
Grant aid/investment finance for ‘baseline’ hub?
Win tenders
Deliver

24. Challenges
‘Procurement-readiness’ - meeting the PQQ thresholds (especially smaller providers)
QA and accountability
Measuring social return
Conflicts of interest – ensuring contestability

25. Critical Success Factors
From culture of entitlement to culture of enterprise
Business skills and entrepreneurial acumen
Long-term vision
Tenacity