1. business and industrial

HOW TO USE THE TOOLKIT
HOW TO USE THE TOOLKIT
This toolkit is best approached as a roadmap for developing voluntary or (VCSE sector)
consortia. It begins at the concept stage, where the idea to work in partnership may be
no more than a flicker in a development worker’s brain. It takes you right through the
development process to the stages where consortia are transitioning to contract delivery,
and even further to the point where the quality of delivered services becomes an issue,
and to maintaining reputation and operational vibrancy.
For those at more advanced stages, this booklet provides a resource designed to be used
together with the website and that can be accessed when needed. It includes a diversity
of testimonies, case study materials and advice on specific challenges that consortia will
encounter.
Some development workers have found that the previous version of the toolkit is difficult
to use because it is inevitably somebody else’s model. Their advice is for development
workers to make this process their own. It is helpful to bear in mind that your particular
needs at the different stages may vary from those suggested by the toolkit, and so to use
the toolkit as a resource to craft an outcome that works for you.
WHO WE ARE: NEIL
COULSON ASSOCIATES/
ACEVO SOLUTIONS
Neil Coulson Associates has come together with ACEVO to develop a set of resources
for consortia including this toolkit (a booklet and an accompanying website) which
it is hoped may facilitate the development of a network and support community for
consortia.
ACEVO is the professional association for third sector chief executives, working to support
leaders through activities that connect, develop, support and represent them. Our mission
is to support the development of a modern, enterprising third sector.
Neil Coulson has 12 years experience as a third sector consultant working with consortia.
He has worked with or advised more than 100 consortia.
We are grateful for the contribution of Children England towards the costs of developing
this toolkit and to Francesca Magog of Children England for her appreciable input.
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If you are new to consortium working and are starting right at the beginning of the
process, the toolkit introduces a seven-stage path for starting up a consortium. Model
documents and templates that can be adapted to your own consortia arrangements
are referenced at appropriate stages and materials can be found on our accompanying
website, www.consortiasupport.org.uk.
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CONSORTIUM DEVELOPMENT TOOLKIT
WHY CONSORTIUM
WORKING? WHY NOW?
SEC
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Consortium working is not new. There have been voluntary sector organisations
operating as part of consortia for many years. But consortium working does have a
particular prominence now and its relevance is amplified by the challenges currently
facing the voluntary sector.
4
The situation today is very different from the situation several years ago. The impact of
the cuts is biting harder, commissioners are implementing efficiencies through both the
various services that they deliver and contracting arrangements – and yet at the same
time they are often concerned to do so in a way that protects the local voluntary sector.
This provides a huge opportunity for voluntary organisations that are able to marshal
new models of delivery that engage with commissioners’ needs.
The need for voluntary organisations to explore consortium working, at least as an
option, is becoming imperative. Janice Bell from Victory Consortium in Portsmouth sums
this viewpoint up: “Everybody who participated (in a workshop) bought into the message
that life was too difficult to go it alone. People realised that organisations need to
sharpen up their act and become more commercially savvy.”
Certainly the extent to which voluntary organisations can continue to rely on grants from
local government is diminishing. In place of grants, many voluntary organisations are
looking to opportunities for funding provided through statutory commissioning. Public
bodies in most places are encouraging a shift from grants to contracts.
Allied to this has been an accelerated drive towards rationalisation in contracting
frameworks and arrangements. In practice, this has translated into the formation
amongst service providers of delivery partnerships, consortia, networks and other forms
of joint venture. A key defining feature of these developments has been the creation of
what might be described as “a single point of contracting”. In other words, instead of
public bodies having to contract with a whole number of small voluntary and community
service providers, with the perception that money is being wasted through the set up
and maintenance of multiple contracting chains, they have contracted with a single
“super provider” or managing agent that is capable of embracing a network of grass roots
providers through sub-contracting mechanisms.
Given the current public spending cuts, all local authorities are having to make savings
and yet are facing a need to continue to deliver good quality services and safeguard local
voluntary sector infrastructure. There have been too many reported incidences of services
being cut arbitrarily because these important agendas have not been married up. Parks
are closed for want of a link made with the wealth of local groups who might have found
a way to deliver cost-effectively the same service. We have spoken to chief executives of
local authorities who have expressed concern at this state of affairs.
However, the onus isn’t just on commissioning practice needing to adapt. Voluntary
organisations need to be looking at their business models and specifically their readiness
to work with other organisations to deliver services on a scale that surpasses their own
WHY CONSORTIUM WORKING? WHY NOW?
capacity. Collaboration should lead to joint business models that are ‘more than the sum
of their parts’.
The problem for voluntary organisations is that their current business models are often
too small scale, narrow or niche to deliver services at the scale that statutory bodies are
looking to commission. Organisations have been put off consortium working because of
perceived threats to their independence, but the models described in this booklet show
how partnerships can be achieved without these handicaps. Many of the case studies
speak to the benefits of working as part of a consortium.
To reinforce this point, consortia are not just about public service commissioning. They
might also be about collaborating to increase the prospects of securing and delivering
business in the open market, e.g. joint approaches to social enterprise. One example of
this is developing a consortium-wide portfolio of services to sell to the corporate sector
or to individual consumers, especially those with access to personal budgets. Although
this toolkit may be useful for organisations wanting to work together for a number of
purposes, it has been specifically designed for groups that want to create a strategic
vehicle for the purpose of delivering public services.
CASE STUDY – FOUNDATIONS UK
Foundations UK is a small but enterprising charity dedicated
to countering disordered eating and obesity in West London.
Foundations’ CEO Mary Wood makes an eloquent argument for
how being part of their local consortium, Desta, has supported
Foundations’ capacity to serve its mission and benefit people
experiencing obesity.
Mary describes the difficult demands that commissioners place on organisations
like Foundations: “On the one hand they want innovative solutions, on the other
they often need these to have an evidence base”. Foundations is at its heart about
challenging ‘medicalised’ approaches to tackling obesity.
The whole point of consortium working according to Mary is that they bring
together organisations that “understand the community problems ‘beyond the
spreadsheet’. The joy of consortium working is that it allows organisations like
Foundations to put our case somewhat subtly to commissioners”. Desta (i.e. the
London-based Health and Social Care consortium) scored an early victory with
commissioners. It was established for only a few months when it won its first
contract to deliver the Expert Patient Service.
Foundations has put forward a psychological and socially-informed intervention
called Step Forward to Health. They applied to the Big Lottery but their chance of
getting 100% funding was remote. However, the fact that Foundations is delivering
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To provide better services in times of cuts, voluntary organisations need to collaborate in
order to be able to engage with the multiple needs of commissioners to provide better
services whilst protecting the local community ecology. And beyond the cuts agenda,
consortia can be used as ways of breaking into new markets, developing new ways of
working, and diversifying what organisations have to offer.
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CONSORTIUM DEVELOPMENT TOOLKIT
the Expert Patient Service as part of Desta’s contract was absolutely critical for
bringing in Big Lottery funding.
SEC
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Mary says, “I think consortia are important in themselves, but I also think they’re
so important in moving people on in the sector to start to think creatively about
strategic alliances. I know some organisations are looking at the whole merger
question, but I think for a lot of us, we’re too small really to become anything but
an acquisition – and we don’t want to do that. A consortium provides the best
of all possible worlds. It provides a way to join with other organisations with the
same values and aims in the community whilst allowing us to keep our individual
identity.”
6
Through the delivery of the Expert Patient Service in neighbouring Westminster,
Foundations established contact with the Migrants’ Resource Centre and was able
to talk with tutors and users about disordered eating. This helped Foundations
access additional funding for a project on disordered eating and its mental health
implications.
POINT BLANK, SHEFFIELD
The benefits and challenges of consortium working from the point of view of a small
voluntary sector organisation
Background
Point Blank is a small arts organisation in Sheffield. It is established as a charitable
company and has its roots in applying the performing arts across a range of contexts.
It has three main strands of activity:
H a schools programme offering workshops, performances and artist residencies;
H a community programme offering training, work placements and participatory
performance projects;
H a national, highly acclaimed touring theatre programme.
It has also purchased a public house, The Riverside, and transformed the building into a
live arts and entertainment venue.
Over the past six years the organisation has been actively involved in consortium
working, being a member of four separate consortia:
H VC Train (now called Sector Solutions), which is a consortium of voluntary sector
providers of post-16 training and education programmes across South Yorkshire.
H Viva (the South Yorkshire Arts Consortium) which encompasses voluntary sector
organisations delivering across a broad range of arts-based media.
H YCS (Youth Consortium Sheffield), a voluntary sector consortium in Sheffield,
comprising 48 organisations that deliver a range of children’s and young people’s
services and activities across the city.
POINT BLANK, SHEFFIELD
H 3SC, the national consortium that functions as a managing agent, securing national
level contracts - for example, the Future Jobs Fund - and then sub-contracting to a
wide range of voluntary sector providers.
All of these consortia are concerned with bidding for public sector contracts.
Financial Benefits of Consortium Working
This is a considerable amount of money for what is a relatively small organisation. Before
it started working in consortia the organisation’s annual turnover was around £125k.
However, today its turnover is more like £400k and the funds it has attracted through
consortium working have made a significant contribution to this level of financial
growth. Critically, it has also provided core funding for the organisation and given it the
platform to invest in new products and services.
Jon Maiden, Development Director at Point Blank, stated that there is no way the
organisation could have secured any of this funding if it had bid for it independently,
outside of a consortium structure, as the contracts were simply too large, both in terms
of the overall contract value and the breadth and scope of the services the commissioner
wanted to purchase.
Other benefits
As well as the funding it has received, Point Blank has achieved a range of wider, added
value benefits from consortium working.
H Access to strategic information and intelligence
As a member of the Youth Consortium, Jon Maiden is able to sit on the Strategy Board,
which controls the work of the consortium. Jon reported that this has given him
access to crucial and timely information and intelligence that has been vital to the
future development and on-going success of Point Blank. For example, he has been
able to access information about what the latest local commissioning intentions are
and therefore been in a position to re-shape the organisation’s services to match these
intentions. He stated that if he hadn’t been involved in the consortium, he probably
wouldn’t have got access to this information, or if he had, it would have taken him a
significant amount of time, energy and resources trying to source it.
H Development of a mutually supportive inter-organisational culture and ethos
Jon remarked that before the establishment of Viva, the arts consortium, local arts
organisations tended to be competitive and mistrustful in their inter-relationships and
that this culture obviously made it difficult for productive joint working to flourish.
However, being involved in Viva has given these same organisations a real sense of
collective purpose and this has helped to foster a positive culture of mutual support
amongst them – “organisations now feel they have a genuine role in supporting each
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The most obvious benefit that Point Blank has secured through consortium working
has been a financial one. Through these different consortium structures it has secured
sub-contracts worth approaching £0.5m over the past few years. This funding has come
from a range of sources – the Learning & Skills Council/Skills Funding Agency, the Local
Authority, DWP and European sources.
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CONSORTIUM DEVELOPMENT TOOLKIT
other and there is much more honesty and openness between organisations”. This
change in culture has started to manifest itself in progressive joint working initiatives,
such as shared approaches to venue/arts space hire.
H Driving up standards and ensuring the best possible service to the end-user
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It has been evident to Point Blank how consortium working can help to improve quality
and drive up standards across the network of collaborators. Providers are able to
benchmark themselves against other consortium members’ performance and there is
also a genuine sense of not wanting to ‘let your partners down’ by under-performing
against the requirements of the contract.
8
Challenges
Consortium working, particularly on this scale, can be time consuming, which is
problematic for a small organisation with limited capacity. However, Jon felt that the
costs associated with this were far outweighed by the range of benefits that Point Blank
had gleaned, not least the significant funding that had been secured but also access to
crucial strategic information
THE PROCUREMENT
AND COMMISSIONING
ENVIRONMENT
Before contemplating setting up a strategic consortium, it is important to understand the
commissioning environment in which it will be operating, to see whether there is a need
for this kind of delivery – i.e. if commissioners will look favourably upon it.
Some consortia have set up only to find out that local commissioning practice
discriminates against them. One consortium, for example, was required to tender as a
‘sub-contractor’ to one of its members, because the local authority would only accept
tenders from bodies with a track record. It is advisable to check whether issues like this
will be a problem before investing too much time in building a consortium. An initial
meeting between consortium steering group members and commissioners is always a
good idea.
This section is intended to provide some background on the commissioning environment,
and suggests issues to raise with commissioners.
Drive to best value
H The single biggest driver propelling change within local statutory commissioning is
the need to generate best value from the money spent on services. Local authorities
have traditionally delivered many of the services they are responsible for in-house,
from refuse collection to care homes. Increasingly they are looking to commission
services from the voluntary or private sectors instead. A number of local authorities
THE PROCUREMENT AND COMMISSIONING ENVIRONMENT
have a structured review process in place to look at whether services could be
delivered more efficiently externally. Where they decide that they can, a formal
tendering process will be launched and tenders invited from interested bodies.
Shift from grants to contracts
H As a consequence of the need to make cuts, local authorities are in the process of
reviewing the funding arrangements that they have with the voluntary sector. Whereas
many local bodies have been funded through grants, the trend is towards contractual
forms of arrangements – such as Service Level Agreements (SLAs) and open contracting
arrangements – under which voluntary bodies commit to offering a service in return
for funding. The new formality of these arrangements has created problems for smaller
organisations that sometimes do not meet some of the formal requirements of the
commissioning processes like having a track record in delivery or a turnover above a
certain level. A focus of much voluntary and community sector capacity building has
been to address deficits in organisations’ capacity to engage at this level.
Contracting/back office savings
H Commissioners are looking to make savings by reducing the amount they spend
on contract management. Where local authorities, for example, have a large
number of contracts with voluntary organisations, the burden of commissioning
and managing these contracts takes money away from front-line services. In some
places commissioners have supported consortium working as a way to reduce the
amount of money they spend on contract management. Commissioners are likely
to be attracted by the argument that contracting with a single consortium point of
contact will simplify the process and save them money.
Overcoming negative perceptions of the sector
H Consortium working can help to turn around negative perceptions that
commissioners sometimes have of the voluntary sector as a strategic partner.
Commissioners we spoke to in a number of local authorities noted that the number
of local organisations sometimes made it difficult to do business with the sector,
and their perception was that organisations struggle to work well together.
Additionally, commissioners often harbour negative views of the local sector based
on their perceptions of the patchy quality of sector-based provision. Correlatively,
VCS consortia are an opportunity to drive up standards across the supply base.
This is achieved through a number of means: for example, (a) the consortium
itself, i.e. as a legal entity in its own right (if that is how it is structured), achieving
a quality mark, e.g. ISO 9001, to provide a new level of quality assurance within
the supply chain; (b) investment in quality development within the consortium
membership via organisational capacity building, agency-to-agency time-banking
etc; (c) establishing membership thresholds and segmenting the membership
according to quality assurance and broader commissioning readiness criteria, and (d)
the inherent psychology of peer-based structures – raising collective organisational
aspirations as part of a jointly owned and controlled collaborative business model.
NTRODUCTION
Consortia provide the additional opportunity to bring smaller organisations into the
commissioning arena (as potential sub-contractors) rather than them necessarily
having to meet requirements in their own right.
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CONSORTIUM DEVELOPMENT TOOLKIT
New opportunities in Health Commissioning
H In the health sector services will in future be commissioned by Clinical Commissioning
Groups with representatives from local GP practices. Some people have argued that the
inclusion of GPs on commissioning bodies will encourage commissioning with more
of a focus on keeping people well, hence it might lend itself to more voluntary sector
opportunities. However, the disarray caused by this change is leading others to fear
that engaging the voluntary sector is unlikely to be an immediate priority.
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Impact of ‘localism’ and Community Right to Challenge
10
H This also links to the Community Right to Challenge, which is part of the Localism
Bill. The Community Right to Challenge enables voluntary and community bodies,
employees of the authority that wish to form a mutual organisation to deliver the
service and parish councils to express an interest in running a local authority service.
The authority must consider expressions of interest and, where they accept them, run
a procurement exercise for the service. The Right will hand the initiative to groups with
good ideas about how services can be run differently or better, ensure their ideas get a
fair hearing, and that they get the time they need to prepare effective bids for services.
Commissioning practice that does not favour the VCS
H Voluntary organisations are often at a disadvantage compared with some of the larger
private sector providers because of the way that services are procured. Issues such as
transferring liabilities i.e. employment (via TUPE arrangements) and pension provision
may be more risky for voluntary organisations that don’t have the scale or existing
structures to take these on. Consortia will face the same challenges but through
building scale they may be able to get around some of these problems.
Opportunities for VCS delivery in new areas
H The above developments may open up opportunities for VCS organisations to be
delivering services in areas where they don’t currently have a presence. Commissioning
agencies will be looking to make savings through preventative solutions and early
interventions. New financing mechanisms such as Payment by Results contracts and
Social Impact Bonds will make some of this ‘spend to save’ investment financially viable
given overall declining budgets.
Plugging gaps in the local supply base
H Consortia can also offer opportunities to plug gaps in the current supply base. Often
there are certain disadvantaged neighbourhoods or communities of interest/social
groups within a local authority district that are under-served by existing VCS (and
wider) provision. Consortium formation affords the potential to plug these gaps in
the supply base through
a. encouraging consortium members to engage in out-of-area working (e.g.
extending their traditional areas of benefit in order to cross-migrate their
existing services into the gap areas) and/or
b. building the latent capacity of VCS agencies already present in those gap areas,
so that they can evolve and extend their portfolios to address the identified
service gaps.
TAKING A STRATEGIC APPROACH
CASE STUDY
BTCV is a sizeable national charity with a fifty year history
of providing environmental volunteering opportunities for
individuals that have a range of multiple benefits for individuals
and communities.
However BTCV increasingly sees its local role as being one of identifying other
local organizations that can come together to offer local authorities more efficient
and effective ways of commissioning services. Ron Fern, Deputy Director of
BTCV says that this could involve BTCV providing some of the hub services to
a local provider network; “as a national organisation of scale we have the ability
to provide a range of support, financial management, HR and other back office
functions which many small local organisations struggle with.”
TAKING A STRATEGIC
APPROACH
Although this toolkit may be useful for organisations wanting to work together for a
number of purposes, it has been specifically designed for groups that want to create a
strategic vehicle for the purpose of delivering public services.
A strategic consortium is understood to be different to one that comes together around a
specific tendering opportunity.
The needs of organisations coming together with strategic aims, and the type of vehicle
that lends itself to this form of collaboration will be different from those of organisations
coming together reactively around a specific tender. The development timescales will be
longer, suiting the needs of a longer-term collaboration and, with the prospect of greater
flexibility built in, allowing the consortium to respond to a wider range of opportunities.
The benefits of developing a strategic consortium include:
H aids partnership working between organisations, since forms of collaboration
which share ownership are perceived as less of a challenge to organisational
independence;
H organisations can develop collective value chains and service pathways to deliver
better services and preventative interventions in areas that may not have previously
been commissioned; mental health, for example;
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However with current policy shifts towards localism and decentralization,
(which means that less central money will available to support its work) BTCV is
reviewing its operational models and looking to find a way of using its experience
more effectively, particularly as a provider of services to local authorities.
Sometimes this will continue to involve BTCV delivering services itself.
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CONSORTIUM DEVELOPMENT TOOLKIT
H by contracting with one point of contact, the substantial costs to local authorities of
contracting with large numbers of third sector organisations are reduced allowing
some of these savings to be passed on to the sector;
H enables building of better relationships and understanding from commissioners,
and can open doors to new and innovative ways of commissioning the voluntary
sector as an alternative to the usual EU procurement routes (increasingly known as
‘pipelining’);
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H positioning the local voluntary infrastructure organisation (e.g. CVS) as having a
pivotal role.
12
ROLE OF DIFFERENT TYPES
OF ORGANISATIONS IN
CONSORTIA
Which Organisations can form part of a consortium?
There are no hard and fast rules for organisations joining Consortia and it is beneficial for
a consortium to have a range of organisations as members, bringing with them a wealth
of experience, which will be of interest to potential future Commissioners.
In the main organisations will be either: voluntary or community groups, charities, Social
Enterprises or Community Interest Companies, and can range from the very small with
little financial backing to larger local, regional or national organisations with significantly
larger budgets and reserves. However, each organisation will need to satisfy the agreed
membership criteria of a consortium.
Small VCSE organisations
Consortia working for smaller organisations can be hugely beneficial. Longer term it
may bring financial stability for them, but also the opportunity to work with a larger
network of agencies who can complement the work they deliver. The advantages of a
smaller organisation being part of a consortium can include: the chance to be mentored
by a more established organisation through a quality assurance process, access to bigger
contracts and training opportunities. For smaller organisations there is an element of
safety in numbers as often they will have few members of staff whose capacity is limited
in terms of potential contribution to the consortium.
Large VCSE Organisations
It is important for any consortium not to rule out involvement of large local or national
VCSE organisations, as they often bring with them a wealth of experience, have more
capacity to support the consortium and are likely to have financial ability to bid/tender
for larger contracting/commissioning opportunities. They will also often have workers
ROLE OF DIFFERENT TYPES OF ORGANISATIONS IN CONSORTIA
who specialise in certain aspect of business, training, etc. that can benefit the consortium
and support smaller organisations to grow.
Local Infrastructure Organisations
CASE STUDY
For a large organisation like Barnardos consortium working
presents different challenges and opportunities. Barnardos created
a post in the North West specifically to explore getting involved in
Consortia, because of awareness of service areas where Barnardos
provide ‘part of the jigsaw but can’t do all of it’. Dave Packwood
from Barnardos gives the example of domestic violence, where
Barnardos does a lot of work but mostly in the context of the
children involved.
Dave illustrates the benefits of the involvement of larger national charities through
their role in supporting the working group for the Greater Together Consortium
in Lancashire. “The majority of representatives were from national organisations
because they were able to release people. A contract came out before Greater
Together was actually formed – an opportunity for some targeted youth support
funding. There was a desire to submit a tender, if not under the name of Greater
Together, then under the ‘aspiration’ of it – i.e. our tender represented the same
partners. Three of the larger national organisation authored the bid, which
couldn’t have happened without their input.”
Dave is clear that most of the bids that Barnardos has been involved with so
far have been for relatively new money and therefore not part of Barnardos’
core business. “If a contract for a Children’s Centre came up in an area where
we deliver the majority of services, we wouldn’t do it, we’d continue to bid as
a sole entity.” Barnardos uses a risk assessment to assess whether a piece of
partnership work is valuable - whether for instance it opens up new markets as
opposed to putting existing business at risk. Dave says that there are limits to the
degree to which a larger contract can be sliced up and still remain valuable to a
larger organisation, “a £1m contract sliced up into 20 bits for example is likely to
be of marginal interest”.
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A local infrastructure organisation does not necessarily need to be a member of the
consortium, however they may be willing to facilitate and co-ordinate meetings and
tasks in the initial phases and at a later stage provide advice and guidance to help the
consortium grow and develop. A local infrastructure organisation will also be able to
provide advice about up and coming funding opportunities, act a conduit to broker
meetings with local commissioners and keep the consortium in the loop as far as local
developments or consultation opportunities. Some Local Infrastructure Organisations
have taken on roles supporting the set up of a consortium, and supplying some of the
key hosting/support functions to a consortium hub – e.g. see Desta case study p24. Other
CVSs have taken on a Lead Agency role for a consortium (see Partnership Models p53)
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CONSORTIUM DEVELOPMENT TOOLKIT
SEC
CTIION 1 / INTRODUCTION
Despite the caveats, Dave is adamant that greater partnership working is the
direction in which the larger national charities need to be headed. Barnardos
for instance has a national programme of work called ‘Go To’ under which
Barnardos will be providing capacity building support to other organisations, and
measuring the impact. Consortium working represents a formalizing of some of
its partnership arrangements.
THE CONSORTIUM LIFE
CYCLE
A consortium goes through a number of different stages during its development, as
explained below. In order to progress to the next stage members of the consortium,
working in partnership to achieve their ultimate goal, will need to complete a number of
tasks, overcome barriers and may even have their trust and relationships put to the test.
The following diagram takes you through each stage of a consortium life cycle and then
an explanation is given as to the actions that should be addressed at each one.
14
Exploration
Sustainable
Consolidation
and Growth
DIAGRAM 1. THE CONSORTIUM LIFE CYCLE
Embryonic
Established
THE CONSORTIUM LIFE CYCLE
STAGES WITHIN A CONSORTIUM LIFE CYCLE
Stage 1 – Exploration
The initial phase in the life cycle of a consortium is the exploration stage, when the
following will occur:
H a meeting of minds – the bringing together of like-minded individuals to discuss
the potential for a collaborative/partnership approach to the delivery of services
by working together more effectively to achieve better outcomes for individuals
accessing their services;
H opportunities can become manifest in different ways: it may be one person who
suggests exploring the opportunity at a network meeting or inviting others to
discuss opportunities or it maybe an infrastructure organisation who brings relevant
organisations together to explore further;
H understand why you want to work in a consortium arrangement; weigh up the
advantages and disadvantages of being part of a consortium;
H do some research on the different consortia models and how they operate and agree
which models you want to consider further;
H partners who want to move forward will need to commit time to meet with each
other and devise a work plan with timescales to meet their objectives;
H any organisation could be invited to be part of the consortium whether not–forprofit VCS organisations, charitable trusts, community interest companies or social
enterprises. They could range from being large national organisations working
in the local area to very small voluntary bodies run by one person with a few
volunteers, serving a particular geographical area;
H determine what you would want a consortium to achieve. For example:
J it may evolve due to a commissioning or grant-funded opportunity;
J it may exist to strengthen the networks between organisations;
J to consider different collaborative opportunities, e.g. pooling funding between
organisations to buy in services;
J to share knowledge, skills, information, training, staff, premises, etc.;
H the lifetime of the consortium will depend on how long you expect it to exist:
J to have a limited life cycle to achieve a single outcome that may only require
partners’ involvement over a short period of time;
J to achieve service delivery objectives against a particular project;
J for the lifetime of a tender opportunity and subsequent contract;
J to allow partners to have a vehicle through which to explore all potential
opportunities on a continuous basis;
H set up an interest/working group to move onto the next stage.
NTRODUCTION
H determining appropriate partners to support the development of the consortium.
A key question to address at this early stage is whether it will be a generic VCS
consortium (like Here2Help in Coventry, for example) or a consortium revolving
around a specific sub-sector or service area (like Sheffield Well-Being Consortium, for
example). If the former model is opted for then the consortium will need to develop
internal ‘clusters’ that are capable of focusing on specific sub-sectors or service areas
(for example, Here2Help is establishing a cluster of homelessness providers);
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CONSORTIUM DEVELOPMENT TOOLKIT
Between stages 1 and 2
In between the initial and embryonic phases each organisation has the opportunity
to reflect on the discussions at stage 1 and present this to their management/trustee
boards.
Note that trustees of VCSE organisations must be informed as soon as possible of the
intention to explore a consortium arrangement, as they would manage the risk on behalf
of their organisation. It is important to have trustees’ approval to proceed to the next
stage.
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Stage 2 – Embryonic
16
The phase at which ideas begin to be formulated:
H partners who want to collaborate establish a working group;
H terms of reference should be agreed to ensure that the group know what is
expected of them;
H in addition, having some ground rules in place will also help everyone to engage
effectively in discussions;
H determine which consortium model the group want to use and explore further;
H areas of work are identified and, dependent on the size, tasks are allocated to an
individual or group;
H agree an action plan identifying what needs to be achieved, by whom, how and
when;
H ensure that all partners are happy to proceed;
H securing capacity to develop the consortium is important and there are a number of
ways to do this:
J members may want to contribute in kind with staff time allocated to the
consortium’s development;
J members may wish to contribute to a pot of money;
J access some grant funding to provide capacity, or
J ask your local infrastructure organisation for some support.
J a further option would be to source a small amount of working capital via a
social investor (this might be in the form of a pure loan or possibly a mixture of
grant and loan);
H the model you choose to implement will determine how much funding will
be required to operate the consortium; for example, if you choose to become a
company limited by guarantee you will need to have legal advice to process the
application; if you want your consortium to have charitable status you will need
funding to apply and the development of branding (a logo), promotional material,
website, etc. to raise awareness of the consortium will also require funding. To
secure registered charity status you also need at least £5k in a bank account;
H there should be an assurance that all partners have equality of status on the
consortium, though there may be a ‘first among equals’ scenario if the collaborators
opt for a loose consortium arrangement functioning via a nominated lead body;
H this is a crucial stage as this is the point at which partners are building their trust
and relationships. Some organisations will have worked together previously while
others will be new to each other. As many opportunities as possible should be taken
within the business development process to enable the collaborators to network,
THE CONSORTIUM LIFE CYCLE
share information and ways of working, exchange views and generally get to know
each other, in order to build mutual trust and develop collective rapport.
Between stages 1 and 2
H Individuals and task groups will need to complete their agreed actions.
H Members will need to ensure that their management groups/trustees are informed
of progress and are happy to proceed.
Stage 3 – Established
H The agreed consortium model is established and relevant paperwork and
documentation to support its operation is implemented; for example, partnership
agreements, memorandum of understanding or articles of association. A key
document is the business plan, which enshrines a collective statement of intent by
the collaborators.
H It is essential that each member of the consortium knows exactly what they can
expect from their membership and they should be able to challenge if they perceive
that other consortium members are not following the agreement.
H The initial collaborators/founder members may want to encourage more
organisations to become members of the consortium, in which case a membership
prospectus should be drafted. The purpose of the membership prospectus is to
ensure that potential members understand the implications of joining and to
provide a membership vetting framework through the inclusion of thresholds.
H Having a name and clear brand identity for the consortium is important to help
raise awareness of its existence with other organisations and to engage and
build relationships with potential funders (commissioners, grant holders, etc.).
Promotional material, with a logo and name for the consortium is also helpful so
that the consortium can develop its own identity.
Stage 4 – Consolidation and Growth
H Establish an appropriate consortium governance structure. If you opt for a loose
consortium with a lead body arrangement, governance could align with the lead
body’s board or management group, though potentially also with a parallel advisory
or steering group, drawn from the wider consortium membership, to feed in the
membership’s perspectives in an advisory capacity. This group will be responsible for
guiding the business of the consortium.
H If you decide to establish the consortium as a company in its own right, you will
need to appoint interim directors and ultimately, once the wider consortium
membership is in place, hold an Annual General Meeting to elect the full Board
of Directors. There should be a mix of Directors on the Board who can adequately
represent the wider membership. In addition having independent members who
can help to shape the consortium from a business or financial perspective would be
helpful.
H Ensure there is an effective communication process in place that keeps all members
up to date with progress and opportunities.
NTRODUCTION
H Develop and agree a business plan which provides a focus for the work of the
consortium and also provides an outline of its core offer to potential commissioners
of services. The business plan should be comprehensive, to the point and realistic. It
should contain SMART targets.
17
CONSORTIUM DEVELOPMENT TOOLKIT
H Consider implementing agreed quality standards for members and support those
organisations that do not have a quality mark through the application process.
H Develop and implement relevant policies and procedures to support the work of the
consortium.
H Have a pro-active approach to identifying relevant tender/grant-funding
opportunities and ensure that relevant information is available in order to be able to
respond at short notice.
H Once funding is secured, establish sub-contracting arrangements/service level
agreements to deliver against the contract.
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H Implement a process for monitoring the performance of the contract.
18
Stage 5 – Sustainability
H The consortium is well established and considered an independent entity capable of
functioning effectively on behalf of its members.
H There should be an annual review of its business plan to ensure that it continues to
meet its objectives and highlights any new issues that need to be addressed.
H Implement a process to demonstrate improvement in outcomes e.g. Social Return
on Investment.
H In order to continue to be visionary the consortium also needs to ensure that it is
capable of addressing new priorities which are emerging locally and nationally.
DEVELOPMENT APPROACH
– OVERVIEW
Why it is important that planning with this toolkit happens in a workshop setting, thus
developing actual relationships.
This toolkit is designed to be used as part of a ‘live’ development process with a group of
organisations, rather than to plan and develop what a consortium might look like without
the organisations being a part of this development.
This allows the technical expertise to be drawn out of the toolkit and be combined with
local knowledge from prospective members. As the range of templates and options for
different structures and legal forms etc. is introduced, this will inform local decisions.
It also minimises the need for additional research into the local context because
prospective members are expected to contribute this understanding to the development
process.
The planning process also happens more quickly than if it were undertaken remotely
from an actual group of members, allowing the relationships to develop alongside the
planning and strategic aspects.
Relationships between member organisations are central to a successful consortium. The
sense of ownership that active engagement in these early stages gives members over the
consortium can be critical to later stages when members need to put their trust in the
DEVELOPMENT APPROACH – OVERVIEW
consortium to make decisions fairly and represent their interests. An open development
process is a good way for members to build this basis of trust.
Using this approach, the formal milestones of consortium development, such as a
consortium business plan and membership prospectus, fall out naturally as outcomes of
the development process.
Timelines
By the end of the development process, in addition to a ‘bid-ready’ consortium, you will
have:
H a good network of relationships and basis of trust between members;
H better ownership of the decision-making process and of the resultant vehicle than if
the planning was led externally;
H a greater capacity and understanding within the local sector of the skills and tools
needed to develop and sustain a consortium.
STAGE 1
GETTING STARTED
STAGE 2
IDENTIFYING ISSUES
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The seven-step process, which is summarised below with a suggested timeline, usually
takes about four to five months. It is reasonable to expect that a business plan can be
prepared within two months of an initial workshop, and a membership prospectus by the
end of the third month.
19
STAGE 3
BUSINESS STRATEGY FOR JOINT TENDERING
STAGE 4
PRODUCING CONSORTIUM DOCUMENTATION
[with working group]
STAGE 5
RAISING FINANCE FOR DEVELOPMENT PHASE
[with working group]
STAGE 6
INCORPORATION
[with working group]
STAGE 7
MEMBERSHIP DRIVE LAUNCH
[company/lead body]
DIAGRAM 2. 7 STAGES IN CONSORTIUM DEVELOPMENT
CONSORTIUM DEVELOPMENT TOOLKIT
Development roles
We have found that there are two key roles in the formation of consortia (although these
may be filled by any number of people); the first is the development worker role and the
second is the expert role. Throughout this toolkit, we will be describing what needs to
be done, mostly by the Development Worker, and flagging up where we think it is more
productive to bring in outside expertise.
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Development worker role
20
It is essential that there is someone to hold an overview of the process, to communicate
all aspects of progress to interested parties, to make the appropriate links with other
sectors (commissioners, users potential collaborators) and to incorporate or integrate
previous decisions and information.
The person in this role can also act as an independent voice/honest broker. A final aspect
is that they can communicate some of the ongoing process to external interested parties.
In the guidance that follows, the tasks for the development worker are identified in each
of the seven stages.
Portsmouth’s Victory Consortium decided to share out the
development worker task between the four to five members of
its working group. Janice Bell from Victory says that “this model
works well where there isn’t the funding for a designated worker;
however, it is important to ensure that people are aware of the time
commitment. Seconding staff for a day a week is preferable to relying
on commitment from over-worked and often too senior people.”
Expert role
In addition to the development worker role, emerging consortia will almost inevitably
need to buy in (or if they are lucky, second in) expertise, particularly around legal issues
and consortium documentation. This is indicated throughout the toolkit and we make
suggestions as to:
H identifying what is necessary and who might help;
H selection and recruitment briefs;
H suggested ways of working with consultants.
This toolkit, if it is purchased, comes with a certain amount of committed support
which can be used to facilitate and bring outside expertise to the initial development
workshops, and/or to bring in specialist support. We can recommend, for example,
providers of specialist legal support.
DEVELOPMENT APPROACH – OVERVIEW
CASE STUDY
Experience of working with consortia from a development
worker’s perspective – Francesca Magog
Consortium working can be exceptionally rewarding but at the same time very
frustrating. Organisations that want to form part of a consortium will be willing
to sign up to do their bit; however, in reality the sometimes limited capacity of
individual member organisations to contribute can seriously hamper progress.
As a consortium
H Identify someone who is prepared to lead and drive forward the development of a
consortium. This could be anyone from one of the organisations involved, a local
infrastructure organisation or someone appointed to support its development. This
person may also take on the role of chairing consortium meetings.
H Outline the roles and responsibilities of each person playing a significant role in
developing the consortium, i.e. chair/lead, development worker, other members of
the consortium.
H Ensure that you have the appropriate representation from each organisation to
enable the consortium to move forward, preferably an individual with seniority, who
can make decisions. However, please note that some decisions can’t be made by
managers alone, particularly for those organisations with Boards of Trustees.
H Be clear about what you can all deliver and put this in writing so that everyone
knows what is expected of them.
H The chair/lead should have excellent organisational skills and an ability to motivate
others to achieve each phase in the development of the consortium.
H Identify what opportunities there are for funding at a local, regional and national
level, at an early stage and ensure that this is kept under review.
H Develop good networks with local commissioners and funding organisations.
H Have a clear, agreed understanding of what your core offer will be to potential
commissioners/funders.
H Agree an action plan to support the development of the consortium, identifying
tasks, key milestones, timescales and individuals responsible for delivering each
action.
H Put in place key documents to support the working of the consortium.
As a development worker
H If the consortium has been supported through the early stages by another person/
organisation ensure that there is a transitional arrangement and relevant handover,
prior to your work beginning. For example, have meetings already been set, venues
booked, what paperwork is in place to support the development of the consortium,
what actions have been agreed and achieved so far?
H You need to be very clear about what your role and responsibilities are.
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The following outlines the experience of a development worker, working across
three consortia in the North East and the issues faced by each consortium in
terms of trying to maintain momentum and the worker’s perspective about what
would help in order to drive changes forward.
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CONSORTIUM DEVELOPMENT TOOLKIT
H You need to identify and agree what is expected of organisations as members of
the consortium, i.e. ensuring meetings are put in diaries, attending meetings and
undertaking agreed actions assigned to them.
H There are a number of things a consortium should implement at an early stage and
this will be dependent on the model chosen:
J membership commitment proforma, i.e. partnership agreement, memorandum
of understanding, membership application process, etc.;
J business plan with a clear focus on what the consortium’s core offer will be;
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J a Board of Directors (e.g. company limited by guarantee) or lead organisation
(possibly working alongside an advisory group) to drive forward the consortium’s
development.
22
H Be able to engage with a wide and diverse group of people from across the VCSE
sector, commissioners and procurers in local authorities, clinical commissioning
groups, external funding agencies, etc.
H Understand and know how you can influence service planning and development
at a local level, as this identifies priorities which are then translated into
commissioning intentions by local commissioners such as the Joint Strategic Needs
Assessment (JSNA).
CRITICAL SUCCESS
FACTORS IN CONSORTIUM
WORKING
The factors that contribute to the success of consortia can be characterised as either
demand or supply side factors.
Demand-side success factors
Commissioner commitment
A chief contributor to success is the local commissioner being keen to explore new ways
of commissioning services and seeing a joined-up approach amongst voluntary sector
service providers as a key part of this. This could be motivated by a whole range of issues:
a reduction in funding leading the commissioner to want to bundle up separate contracts
into a single, larger package of funding, so as to save on administration and transaction
costs; a perception that current service delivery is too fragmented or incoherent; a desire
to bring new, more niche providers into the supply chain and so on.
Without such commissioner commitment being in place at the outset of the process,
it is certainly not impossible for a voluntary sector consortium to succeed, but the
collaborators would need to put a lot of time and effort into a robust, medium- to longerterm commissioner influencing strategy in order to nurture the necessary commitment.
CRITICAL SUCCESS FACTORS IN CONSORTIUM WORKING
Commissioners’ attitude to change and risk
Related to this is the attitude to change and risk amongst commissioners. There are a
number of barriers facing consortia inherent in the way that services are traditionally
commissioned. These can range from formally constituted consortia struggling to
demonstrate that they meet the PQQ thresholds relating to track record and financial
standing (simply by virtue of being new organisations), to there simply being insufficient
word space available in PQQ and tender proposal forms to describe adequately and
therefore do justice to a joint approach involving several different service providers.
Market opportunities
Clearly there needs to be sufficient openings (whether current or impending) in the
commissioning and procurement market to justify the time and effort involved in
developing a consortium. This is a routine part of demonstrating the feasibility and
business case for the consortium initiative.
Supply-side factors
There are also a host of factors on the supply side, i.e. on the voluntary sector
collaborators side of the equation.
Entrepreneurial aptitudes
There is a series of what might be described as ‘entrepreneurial’ qualities or aptitudes
that the collaborators need to possess.
These include:
H Vision: being able to ‘see the wood for the trees’ and having a clear sense of what is
achievable in the long term.
H Leadership and drive: certain people need to lead and drive the consortium
development. One of the dangers of a formal consortium that is jointly owned by all
the collaborators is that a ‘leadership vacuum’ can emerge; a sense that ‘because we
are all equally responsible, no one of us is!’ In this scenario the individuals involved
need to be clear about committing to lead on and undertake certain tasks that will
move the process forward.
H Resilience: inevitably, like any new business venture, the consortium will hit
stumbling blocks, things won’t go to plan and there will be set-backs – a bid for
working capital fails, negotiations with commissioners seem to stall etc. In these
instances the collaborators will need to have sufficient staying power to bounce
back and keep things moving forward.
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Commissioners need to be prepared to flex existing commissioning arrangements in
order to better accommodate consortium bids. Also, there is often an imbalance of risk
in the commissioning arena, with small voluntary organisations being expected to meet
challenging PQQ thresholds and typically to compete with larger private sector bidders
for contracts. There needs to be recognition amongst commissioners that the balance
of risk needs to be adjusted and that voluntary sector consortia can play a pivotal role in
achieving this adjustment.
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CONSORTIUM DEVELOPMENT TOOLKIT
Access to finance
There is a clear link between access to development and working capital at different
stages of the business life cycle (though especially at start-up and early implementation
stage) and ultimately the success of consortia in winning contracts and delivering high
quality services.
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Typically, there is a lot of work to get through in establishing a consortium from scratch –
plans to be written, policies to be developed, systems to be put in place. All this requires
some level of resource.
24
One option is for the collaborators to commit in-kind resources by agreeing to undertake
certain tasks (a collaborator agrees to lead on writing the consortium business plan, for
example), though it is usually difficult to get everyone to agree to this, often because the
collaborators have limited internal capacity themselves.
A preferable way forward is to source actual cash investment. This could come from a
number of channels:
H the collaborators agreeing to commit small amounts of working capital/seed corn
funding from their own coffers (but this can be problematic for small organisations
with limited resources);
H sourcing development grant funding from the Lottery or a Trust/Foundation;
H securing seed corn funding from a commissioner/public body;
H negotiating a loan investment from a social investor.
Access to appropriate business support
Collaborators who are able to access appropriate, specialist business support or external
consultancy are also likely to increase their chances of success. Securing relevant
expertise can help the partners to fast-track certain aspects of the development and
implementation process, especially those of a more technical or complex nature.
Learning from other consortia and linking into consortium-related networks is also a key
ingredient in the recipe for success. This enables the collaborators to learn from what
works, and, just as importantly, understanding what doesn’t.
CASE STUDY – DESTA
HAMMERSMITH AND FULHAM
Desta Health and Social Care Consortium was incorporated in
February 2011 and registered as a charity in July 2011. It operates
across eight London boroughs: Brent, Ealing, Hammersmith &
Fulham, Harrow, Hillingdon, Hounslow, Kensington & Chelsea
and Westminster and had thirty-seven member organisations at
January 2012.
In June 2011, Desta won its first NHS contract for £670,000 to deliver the Expert
Patient Service. By October 2011, Desta had completed its first TUPE transfer, put
CRITICAL SUCCESS FACTORS IN CONSORTIUM WORKING
in place a GAD - certified comparable pension plan and commenced delivery
with eight partner organisations across three boroughs.
Desta was established by CaVSA Hammersmith & Fulham (CaVSA), the local
Council for Voluntary Service which, as part of an earlier consortium of local
organisations, had secured £0.5m BASIS Big Lottery funding to set up four
voluntary sector consortia by August 2013.
Shani Lee, Head of Partnerships and Commissioning, was appointed as the lead
for consortium development in CaVSA. She came with background experience
in voluntary sector economic development and business support, including
partnerships and other informal consortia. It gave her an understanding of the
kind of tensions around equality between organisations and the need, on one
hand, to support smaller bodies, and on the other hand to manage risk and
liability for larger organisations. Shani is also deeply committed to a diverse
voluntary sector ecology – as were the commissioners – and the importance of
small niche providers. The challenge was to develop a single point of contracting
that would allow small organisations to participate, and that would also manage
risk.
Armed with a checklist of issues, Shani attended a workshop delivered by Neil
Coulson for ACEVO’s Procurement Champions Network in June 2010. The ‘hub
and spokes’ structure of the formal consortium model addressed many of her
(long) list of issues. The consortium is owned and controlled by its members,
with each member having an equal vote; the trustees are compelled to act in
the interests of the consortium membership as a whole. At the same time, the
consortium is run by a democratically-elected strategic board which provides
strong leadership, governance and collective intelligence and is supported by
professional business and contracting expertise through the hub.
Much of Shani’s role involves relationship building. For example, the Health
Commissioners were already very positive about working with a consortium but
Shani had to ensure that they understood that the ‘hub and spokes’ model would
meet their needs, and responded to their concerns about risk management and
quality assurance. Regular updates took place with, roughly, fortnightly phone
contact and brief meetings every six to eight weeks for about a year, prior to the
invitation to tender.
Local voluntary sector organisations required surprisingly little persuasion
of what they stood to gain through a collective approach. Smaller bodies in
particular understood that they needed to be part of larger structures in order
to engage with wider opportunities. In several cases trustees had mandated
their senior management to support the consortium’s development. Other
organisations were happy that CaVSA was setting this up, and were happy to be
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There was already an excellent relationship with local PCT commissioners who
had approached CaVSA about developing a partnership of voluntary sector
organisations with a lead body. The PCT was looking for a single provider to
deliver an aggregated service with an annual contract value of £337,600 across
three London boroughs. Previously, the PCT had had contracts of £16,000pa with
many small voluntary organisations that commissioners had directly supported.
These were located in one borough and, individually, would not have had the
capacity to bid or to manage a tri-borough service.
25
CONSORTIUM DEVELOPMENT TOOLKIT
approached to join once the consortium was established. On the whole, larger
organisations found it more difficult to adapt to a joint approach, although they
recognised the needs and benefits for individual organisations of operating as
part of a consortium.
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Advice to consortium start-ups
26
Shani appreciates that CaVSA has been fortunate to have had the BASIS
funding, which has paid for Shani’s post and for running costs of the consortium
infrastructure and given them some breathing space when it came to looking
for contracts. However, the actual costs of setting up a consortium are not that
great, and she believes that the development role can come from a number of
organisations working together. CaVSA’s task has been made easier due to the
good relationships already fostered within the sector. Having these networks
already in place makes the task of developing a consortium much easier.