1. Can the private sector add value to the service?
Jason Walton
Client Side Advisor

2. What do we mean by private sector involvement?
This presentation is concerned with service provision by the private sector, as opposed to the public sector as in the Bexley / Kent. Several terms are used for this…
Partnering
PPP
Joint Venture
Outsourcing
Strategic Partnership
Private Sector Service Provision
Divestment

3. What does outsourcing look like?
Typically an outsourcing will have several features…
Multi year arrangement e.g. 7 – 10 years, may be extendable
May involve some transfer of staff e.g. via TUPE, and maybe assets
The service provider will agree to meet output based requirements
Governed by a contract or possibly as part of a joint venture
Price can be fixed to a certain extent
More transformational outcomes are now more common in this ‘second generation’ of outsourcing
The Authority needs to retain some intelligent client function

4. Why do Councils outsource services?
Cost reduction…. yes that’s most common, but that is not the only or sole reason, others may include…
Focus on more strategic objectives / ‘what we are good at’
Economies of scale
Innovation / fresh impetus
Investment
Access to niche skills and resources
Gaining attributes that we may not be strong in

5. What's in it for the private sector and will our goals be compatible?
Money – medium and long term return for shareholders
Occasionally also market share or market entry
Are these compatible with our aims?
They can be… this needs us to be clear on what our aims are, and then it takes care and skill to build these into a commercial model which rewards the service provider for the right behaviours

6. Would the private sector be interested in Registration Services?
I think so as it ticks a number of boxes for the private sector:
Market size - crude analysis suggests that the current size is around £200m pa (173 Registration services approx ave £1m cost each)
Ability to bring some benefit to the table, maybe commercial skills?
Horizontal expansion from other Local Authority service areas
Clusters of existing services may be more attractive
Of course there is currently a legislative bar which means that without its removal or another solution outsourcing would be ultra vires.

7. What approach would a private sector organisation take to this service area
In order to recoup any investment, cover bid costs and make a profit margin a service provider will need to find financial benefits
They will do this by reducing costs and increasing revenues, but for Registration services I doubt this means a staffing ‘slash and burn’ 
I think organisations would look for efficiencies to free up staff time then bring in their commercial expertise to exploit this time to generate new revenues
This may mean extended roles for staff, and exploration of the commercial opportunities that exist e.g. tie-ins with wider service providers such as the trains example, removal of restrictions on marriage service times, digitisation of certificates etc.
I think there may be a deal to be done… for instance the private sector takes the ‘risk’ of zero cost service provision and then shares any profits above a certain level with the Council

8. So… ‘Can the Private Sector add value to the service?’
This is to an extent subjective and quite political…
They undoubtedly could bring ‘good things’ but there would be elements that may not sit well with the current ethos
This would require deep consideration of what our objectives are, how we measure performance and the tricky subject of ‘quality’
There are pitfalls to such outsourcings, and the procurement alone is a major investment
However I believe with advice to counterbalance the experience of the bidders and a correctly structured approach including the necessary ground work then yes there is good reason to think this could generate benefits for citizens (service), Authorities (financial) and indeed you as individuals (careers)

9. Jason Walton jwalton@impower.co.uk T: 07843 352764 www.impower.co.uk
Questions
Jason Walton T: