1. Building Better Opportunities Skills to successfully apply for and manage ESF funding - the Governance workshop

2. Session Aims To consider the governance issues involved in bidding for ESF/Big Lottery Opt in funding – Building Better Opportunities. To be able to action plan what your organisation needs to do in terms of its own governance

3. ESF/Big Lottery Opt In – Building Better Opportunities. What’s it all about ?

4. Basic governance questions for your own organisation.... Are you able to undertake contract funding ? Who needs to be involved ? Does your outline proposal fit in with your organisation’s objectives ?

5. Specific issues to discuss with your board.... Complexity & burden of administration Risks and rewards – claw back, reputational risk etc. When to talk to talk to your board ? Make it timely

6. Two stage application process Stage 1: Named consortium partners Stage 2: Partnership agreement in place

7. Consortia ? informal – “gentleman’s handshake” legally bound structures with a sub- contracting lead agency the development of a new 'special purpose vehicle' (SPV) that sits independent of all its composite partners.

8. Why the sector tends not to form consortia (NCVO research) Relationship issues – fear of losing independence – collaboration as first step to merger ? culture of competition within the sector + perceived risk of sharing commercially sensitive information. trust - Do the other organisations share your principles and approach? Changes that collaboration might bring- fear that unit prices for service delivery will be fixed – causing a reduction in income for this work and future work.

9. Why the sector tends not to form consortia continued... (NCVO research) Capacity, strategy & experience issues Lack of experience/lack of confidence in collaboration. Time and capacity- consortia for tenders require roughly nine months to develop. Lack of strategic foresight - organisations look to consortia development primarily because of commercial drivers – and our experience is that the tender opportunities don’t come up often.

11. Summary..... Many organisations don’t think the risks are worth it.

12. But..... Reasons to form consortia Funders are increasingly asking you to. Tender opportunities are getting bigger – covering more services & wider geographical areas. Collaboration as a way to combat mission drift – you do only the bit you are set up to do and are good at. Collaboration to get around the 25% test. (The annual value of a contract being tendered as a percentage of an organisation’s annual turnover) The ESF/Lottery Opt in as a test for future collaborations...

13. Exercise: What are the issues you need to discuss with potential partners ?

14. Addressing the relationship issues Put in place a system for managing internal competition – and address at the start subsequent implications of either success or failure to deliver contract quality. Agree in advance common standards, polices, IT systems and management processes that should be used. Decide whether and how individual members can bid for the same contract as the consortium – agree it and give it consequences. Agree what the deal is on the protection of intellectual property and data.

15. Addressing the relationship issues continued.... Agree the way the consortium will be branded so that benefits gained through the contract in terms of reputation, influence, and access to future funds and fundraisers are shared. Agree what the costing model is and how it will be used. Agree how the work will be allocated.

16. Internal competition – dealing with the biggest relationship issue ? Membership issues Develop membership criteria for initial entry to the consortium. Develop criteria and entry requirements for any additional associates. Develop procedure for support and/or expulsion of individual members in the case of service failure. Develop procedure for contract termination for the consortium as a whole. Process Issues Identify and allocate risks and management roles, based on suitability of each partner. Develop process to determine who bids for and who delivers which parts and volume of contracts/bid. Develop incentives and disincentives for quality provision. Develop performance management and monitoring.

17. Common models of consortia Lead agency or Revolving lead agency Hub and Spoke

18. Lead agency model – or lead bidder model Lead agency organisations:- are often larger organisations that already have a good track record in delivering & co- ordinating projects/contracts are financially resilient possess the capacity to lead the delivery of the contract. are able to undertake reporting & monitoring required by funders. are able to receive payment and act as an exchequer on behalf of the consortium, sending out required payments to its sub- contractors. manage the coordination of the delivery of the contract with the support of the sub- contractors. negotiate contract variations on behalf of the consortium through the life of the contract. are liable for any breaches of contract by their sub-contractors The lead agency supports development of the bid in a consortium and enters into sub-contract arrangements with its consortium members and they together deliver the services.

19. Hub and spoke model The Hub is usually a new/existing incorporated organisation – “Special Purpose Vehicle” (SPV) often referred to as the 'Super Contractor' or 'Hub and Spoke' consortium. Usually developed so that it is equally and jointly owned by its member organisations. The hub’s board of directors is elected at an AGM and candidates are drawn from its owner/member organisations. They hold the responsibility for running the hub organisation on behalf of the wider membership. The hub carries out the same responsibilities as the lead agency model but usually the hub does not deliver public services but specialises in supporting its members to win contracts and deliver them. For Building Better Opportunities it’s already been stated that “ the lead deliverer has to be a significant deliverer of services”

20. Sample Partnership Agreement agree the format in advance where possible keep is simple have one common agreement

21. Any questions ?

22. Building Better Opportunities Humber Information Local project website - bboh.cert-ltd.co.uk Sources of support & information on consortia development Talk to your local infrastructure support organisations and see what they can provide NCVO, NAVCA & Community Matters websites