From the 2016 NCVO Funding Conference in association with Kingston Smith

1. BUILDING A SUCCESSFUL
CONSORTIUM
29 FEBRUARY 2016
Lev Pedro
Neil Coulson

2. WELCOME

3. THIS WORKSHOP WILL COVER
• Drivers for forming a consortium
• 10 stages of consortium development
• Consortium models
• Risks and mitigation
• Case studies
• Q&A

4. DRIVERS

5. BARRIERS FOR SMALL ORGANISATIONS
• Unable to find out about opportunities
• The procurement process (e.g. complex,
expensive)
• Contracts are too big and/or broad
• Pre-qualification
• Lack of understanding of the requirements
• Cashflow
• Social value often not factored in

6. EXTERNAL
Aggregation of
contracts
Competition
Best value
Whole person based
approaches
Innovation
INTERNAL (SECTOR)
Fragmented services
Competition
Patchy quality
Lack of scale
Tender capability/lack
of capacity
OPERATING ENVIRONMENT

7. DEVELOPMENT PROCESS

8. COLLABORATION SPECTRUM
Network
Partnership
Joint venture
Loose consortium
Formal consortium
Merger

9. 1. Sector
scoping/gauging
interest
2. Steering group
3. Start-up funding
4. 3Year
Strategic/Business
Plan
5. Membership
Prospectus
6. Membership
recruitment
7. Incorporation
8. Grant
aid/investment
finance for
‘baseline’ hub?
9. Win tenders
10. Deliver
10 STAGES OF DEVELOPMENT

10. CONSORTIUM MODELS

11. PROVIDER
Contractor
Provider Provision of Services

12. MANAGING AGENT
Contractor
Managing Agent
Sub-contractors Provision of Services

13. MANAGING PROVIDER
Contractor
Managing Provider Provision of Services
Sub-contractors Provision of Services

14. CASE STUDY:
YOUTH CONSORTIUM SHEFFIELD
• Loose consortium of c. 20 providers
• Zest is managing provider
• £2m of contracts for Positive Activities,
TargetedYouth Support Services and work
with NEETs

15. MANAGING AGENT/PROVIDER
• Contract top slice
• Percentage of contract to pay for
management of sub-contractors’:
• performance
• quality
• financial management

16. VERTICAL ALLIANCE
Commissioner
Managing Body
FrontlineVCS Providers

17. ‘SUPER PROVIDER’
Provider
Provider
Provider
Provider
ProviderProvider

18. TERMINOLOGY
Super Provider
Formal Consortium SPV

19. HOW DOES IT WORK?
• Incorporation to form new legal entity
• Providers become members of the company
• Hub and spokes operating model

20. HUB & SPOKES OPERATING STRUCTURE
Support
Unit
Provider
Provider
Provider
Provider

21. HORIZONTAL ALLIANCE
Frontline VCS ‘Super Provider’
Commissioner

22. OWNERSHIP & MANAGEMENT STRUCTURE
Board
Member Hub Member

23. SOCIAL OWNERSHIP
Owned and controlled by the members
2 tier governance:
• Council of Members
• Board

24. CASE STUDY: GREATER TOGETHER
• CYP & Families consortium in Lancashire
• Set up in 2011 - investment from LancashireChildren andYoung
People’sTrust Board
• Formal consortium established as charitable company
• 2012 - won first contract - £750k to deliver targeted youth
support services
• 2013 - investment from Social Investment Business/second
contract secured - £2.5m for Early Support services
• 2014 - third contract secured - £1.5m for domestic abuse services

25. RISKS AND MITIGATION

26. CONSORTIUM DEVELOPMENT: RISKS
1. Lack of commissioner buy-in
2. Internal conflicts of interest
3. Lack of consortium member buy-in
4. Lack of start-up / working capital
5. Subcontractor / delivery failure
6. Unable to sustain hub

27. FURTHER
INFORMATION
Lev Pedro
020 7520 2411
lev.pedro@ncvo.org.uk
Neil Coulson
020 7520 2411
neil.coulson123@btinternet.com

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