Voluntary Sector North West conference

What does the transformation ofinfrastructure look like?

Bill Freeman – NAVCA

22 November 2012

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Transforming Local Infrastructure• £30million competitive fund from OCS aiming to create sustainability in

the long-term without ongoing support from central Government.• One bid was allowed per upper-tier local authority; 74 awards made

(about half of total).• Projects encouraged to focus on:

– collaboration and consolidation; – redesign and integration of services;– Better links with local businesses;– peer-to peer support; and– stronger partnerships with local statutory bodies.

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How do we deliver transformation?• Helping organisations to create clarity and consensus about how they can

collectively renew and fulfil their promise to local stakeholders.

• Making better judgements about the financial viability of services, their value to users and how they can be delivered more effectively and efficiently in the future.

• Developing more robust and resilient business models with a viable mix of products and services which all draw in different types of income and don’t crowd out others.

• Increasing the range and levels of skills of staff and volunteers and mobilising people outside of your organisations.

• Improving connections within the sector and between sectors.

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Who provides

• Reorganising relationships between providers.

– Organisational integration.

– Physical integration.

• Rationalisation: creating methods for deciding who provides, including approved provider lists and local kite-marks and quality assurance mechanisms.

• Focus on mobilising others to provide support, i.e. private sector.

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Who provides – organisational integration

• One third identify some form of merger, amalgamation, joint venture or alliance between partners in the bid as part of their outcomes/activities.

• Another 40% express an intention to explore greater collaboration, integration or reconfiguration between organisations, which may or may not result in mergers being considered.

• In some cases a new organisation or joint venture is proposed as the precursor to further alignment or rationalisation.

• Several partnerships are looking to develop a formal partnership agreement or alliance, agree collaborative working arrangements or identify a new shared service or business model.

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Who provides – physical integration

• Around 20 partnerships are exploring co-location with partners and/or other groups.

• Around a quarter of bids refer to the sharing of premises and the transfer of capital assets (buildings) for use by the sector as a means to generate income and increase sustainability.

• At least eleven areas are looking to co-locate infrastructure organisation and/or create a VCS Hub which provides a focal point for the sector and benefits in terms of cost savings, income generation and increased sharing and joint working between organisations.

• Others talk in more general terms about shared back office virtual or physical one stop shop.

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How is support organised and delivered?

• Virtual integration – shared IT/web portal– Common relationship management databases and/or brokerage

services – Shared diagnostic tools, health checks, self-help resources and referral

mechanisms – gateway to a prospectus of services, back office support or training

opportunities – Shared information management and/or e-bulletins – Shared communications and marketing

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How is support organised and delivered?

• Improving relationships with the statutory and private sectors

– around 90 per cent intended to work with the private sector.

– Around two thirds mentioned working with the public sector.

• Many express a general aspiration to develop better relationships to increase awareness of the sector through

– increased contact and engagement

– new partnerships

– better information for existing and potential partners as a result of consolidating and improving the infrastructure service/support offer.

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How is support organised and delivered?

• Broadening income base

– increasing fundraising activity, primarily targeting business and individual donors.

– developing and marketing saleable services.

• These services include:

– Back office services – including central purchasing (utilities, consumables), HR, finance services, IT and office facilities;

– Contract management;

– Consortium development;

– CSR support package; and

– Training and consultancy.

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How is support organised and delivered?

• Some areas plan to set up a trading arm or social enterprise to manage their income generation activity

• Some areas clearly intend to consult on their approach to charging

• Others are exploring voucher schemes or subscription models • In some cases paid for services are to be marketed to public

and/or private sectors as well as VCS organisations

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What is the new offer to groups?

• Voice and representation • Volunteering• Supporting VCS to generate more income• Skills and training• Mentoring and peer support

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What have NAVCA been helping with?• Leadership development programme – bringing together

cohorts of like-minded leaders to deepen their leadership capacity. Co-designed with chief officers themselves, the programme includes a three-day residential and a focal development project.

• Learning and development –topics and activities include strategy and business planning, change management; embedding entrepreneurial thinking.

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What have NAVCA been helping with?• Service review and remodelling – helping organisations and

partnerships develop new approaches to service delivery that are more resilient to changes in funding and demand.

• Collaboration support – working with groups of organisations to think about their relationship and how they can achieve their missions more effectively by working together.

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Potential barriers to success• Business development theory and practice applies to single organisations

and its harder when applying them with a partnership.

• Heavy emphasis on rationalisation within areas but not between areas.

• Many of the initiatives are creating infrastructure to manage and coordinate services, which all carry overhead and might still need up-front funding.

• Not enough emphasis on changing the size, shape and scope of organisations – still aiming to be ‘large and in charge’.

• Restructuring of providers might be additive, not transformative.

• Unsettling and often puzzling policy and funding environment – Building Capabilities.

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Charging ahead:Charitable and commercial models

• Charity model– Principally driven by development and delivery of grant-funded

activity. Once up-front payment has been received management effort is directed towards generalising the benefits of a service to the maximum number of potential beneficiaries.

• Commercial model– Principally driven by the creation and sale of products and services

whereby management effort is directed towards marketing and controlling access to the benefits of a services to maximise value for fee-paying customers.

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Charging ahead:Charitable and commercial models

• People are often talking about ‘replacement’ with one type of funding with another, but earned income doesn’t easily supplant grant funding.

• It can be difficult to reconcile these two competing management imperatives.

• Concerns about charging.– Matters of principle – tainting the process of providing support.– Prevalence of willing customers in patch to create a viable service.

• Support providers that generate a higher proportion of income from charging for services have a more positive perception of the quality of those services.

• Smart organisations create a seamless spectrum of support from free to charged-for services.

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What are we looking for?• Organisations need to have a robust and resilient business

model that can…– Deal with the variety and uncertainty of demand.– Draw from a deep well of experience and expertise inside and outside

the organisation.– Attracts a diverse range of income types through different products

and services.– Use commercial income to cross subsidise charitable activity so it can

still help those that cannot pay.– Offer seamless support that channels all this into a clear and

compelling offer for funders, donors, users and customers.

Voluntary Sector North West conference

What does the transformation ofinfrastructure look like?

bill.freeman@navca.org.uk

0114 278 6636