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