Building blocks of cross sector partnerships

By Tessa Kipping 14 November 2012

With the press highlighting examples of private businesses and charities that have failed to work together to deliver contracts, such as the Work Programme, NPC and BSA assembled a group of charities and businesses to explore the perceptions and realities of new types of relationship models. A lively discussion took place with speakers from NCVO, Trowers and Hamlins LLP and Catch 22, with each organisation describing their experiences of private and voluntary sector partnerships.

In the early 1900s, Catch 22 ran early probation services from the coffee houses next to St Pauls. Today, the charity acts as a subcontractor for Serco with whom they deliver a £450m contract to build and run a prison in south-east London, and also run services in HMP Doncaster designed to improve long-term outcomes for prisoners and reduce re-conviction rates. Catch 22 also subcontract out delivery to smaller charities, making them an invaluable part of the supply chain. The charity’s attitude is one of pragmatism and vision; they focus on outcomes, objectives and ‘getting the job done’, viewing their prime/sub relationship as a strategic decision designed to support beneficiaries in the most efficient way.

The roundtable discussed the creation of new types of relationships when bidding for larger service delivery contracts. These vary greatly, from the prime?sub model where strategic objectives, risk and exit strategies are written into the design, to ‘bid candy’ contracts where charities are written into a bid to increase its chances of success.

Relationship models have diversified, with the development of joint ventures, prime/subs, mutuals and social enterprises enabling organisations to bid for and win government contracts. Cross sector working can create a perfect balance of skills and expertise: corporates do not have the delivery skills to supply public services; whilst charities, on the whole, struggle with the ability to deliver at scale, access sufficient capital and develop an aptitude for risk. These skills sets can work together to deliver complex contractual agreements.

However, charities still approach these types of relationships with trepidation and even negativity. Working with organisations not perceived to be “on mission” or culturally aligned seems to be a major stumbling block in the approach to forming partnerships . This is often a language-based problem, with one leading charity saying they felt more like a translation service than a delivery body—but one that is wholly surmountable with the correct attitude and resources. A real and potential barrier to success is that ill-planned commissioning and inappropriately low tariff based payments for beneficiary outcomes can result in delivery service failure before it has even begun. New research from the University of York shows that placing a young person in sustainable employment saves around £59,000 in benefits costs, with an additional £100,000 in ancillary cost savings. Government contracts allow for nowhere near this level of financial reimbursement. Political motivations squeeze contracts until they become undeliverable and low levels of data make effective pricing of services problematic.

However, new types of working models do work—we have seen a raft of successful cross sector partnerships, with Rehab and Interserve, Serco and Catch22 amongst them. Advice from yesterday’s roundtable included:

  • Objectives—create clear and measurable objectives, using data and baselines in the process. Focus on the main reason for bidding and working together—the wellbeing and support of your key target groups—and create structures that support them.
  • Cultural values and language—you’re not that different. Charities and businesses may differ in terms of language, but  human similarities and the desire to make a difference cuts across all sectors. Business leaders urge charities to ignore ideologies and focus on delivery.
  • Risk—look at the best place that risk can be managed along a supply chain agreement or a joint venture and put the risk there. Don’t push risk onto other organisations that can’t manage it.
  • Negotiate—hold your nerve and stick to your guns. Read contracts thoroughly, negotiate to enable effective service delivery and push back on things you don’t agree with. The ability to assert your position and be proud of what you bring to the table is key to getting what you want from these relationships.
  • New types of working models can and do work—it will just take some re-ordering of our back rooms and a realignment of cultural norms. Cross sector partnerships are here to stay—we just need to get on with it.