Will a strategic partnership save money for a police force? Gary Bandy
Jun 25, 2015
Will a strategic partnership save money
for a police force?
Gary Bandy
Maybe
What do we mean by strategic partnership?
Spectrum of partnerships
service contract
management contract
build, own, operate, transfer
build, own, operate
design, build, finance, operate
service concession
design & build
design, build, operate, maintain
privatisation
priva
te se
ctor
risk
70s–80s 90s–00s 10s →
Value
TransformationalLong-termOutcome-based
Lowest priceSingle service contracts
TransactionalProcess-based
Strategic Partnering
Business Process Outsourcing
Competitive Tendering
Economy
Efficiency
Effectiveness
Liverpool CouncilSheffield CouncilOldham Council
Refuse collectionCateringCleaning
Lincolnshire PoliceCleveland PoliceBarnet CouncilNorth East Lincs Council
Source: Public Services Industry Review, BERR, 2008
Reasons to seek a partner
• to save money
• to transfer risk
• to comply with law or regulation
• to address a lack of capacity
• to access skills, technology and/or finance
How can a partner save money?
• process improvements
• supply chain management
• performance management
• employment costs
• quality shading
How much have you heard can be saved?
20%Myth or reality?
Headline savings & contract variations
• Direct savings from contract price
• Guaranteed savings from other budgets
• Future projects and change
4 ways to save money
• reduce the standard
• reduce scope
• increase threshold to limit access
• reduce demand
A partnership could help with all of these
Competitive dialogue
1% to 2%
Costs of procurement
Impact on retained organisation
• budgets for contract payments
• contract management
• pensions
• overheads that are “stranded”
Risks that can usually be transferred
•design and management of operating methods and processes
•recruitment, training, retention & performance of staff
•purchase, repair, maintenance, replacement of equipment
•supply chain management
•pay rises and price inflation
Risks that (usually) would not be transferred
•changes in laws and regulations not known at the time of the agreement
•changes in political control
•changes in specification of outputs
•changes in funding
•claims relating to period prior to the agreement
Risks created by a partnership
•partner’s poor performance at delivering the service/project
•partner’s financial viability
What does a strategic partnership offer your
force?
It’s not a panacea; it won’t solve all your problems
Conclusion
•strategic partnerships have benefits
•can help save money
but it is up to the partners
Contact info
@garybandyuk
www.garybandy.co.uk