Partnerships: value for money

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Partnerships value for money

• Lis Carter
• Paul Watson
• GVA Grimley

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Contents

• Property Partnerships
• Value for money
• Property partnerships as a value for money
  solution
• Case studies
• Property partnerships essential ingredients

3

Property partnerships - definitions

• A Strategic Service Partnership (SSP) is a
  medium/long-term partnership between
  organisations that work collaboratively to
  achieve shared aims and objectives for delivering
  required services and outcomes
• SSP approach is based upon applying the best
  approach to achieve the best service in the
  best way to secure best value

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Property partnerships - distinguishing features

• Alignment of business cultures, service delivery
  aspirations and activities
• Shared vision, commitment and objectives
• Medium to long term commitment
• Openness and transparency
• Collaborative rather than confrontational or
  merely co-operative
• Focus on results not process

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Property partnerships - distinguishing features
(contd)

• Not just about cost
• Output/outcome based with incentives for provider
  to secure continuous improvement
• Possibility of joint approach - developing
  specification funding and investment service
  delivery shared responsibility for quality and
  efficiency
• Flexibility

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Property partnerships - significance to Local
Authorities

• Fundamental to Central Government policy
• Modernisation and Change agenda
• Improved public services
• Best Value
• Efficiency savings and gains
• Joined up services
• Risk transfer
• External funding and investment
• Private sector innovation

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Property partnerships - benefits

• New funding and investment
• Step changes, breaking down barriers to
  improvement
• Increase capacity
• Additional skills, expertise and resources
• Risk transfer
• Innovation and entrepreneurialism
• Allows LAs to focus on core services
• Greater accountability
• Efficiency gains/savings in service delivery
• Reduction in optimism bias - consideration of
  whole life costs

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Property partnerships - pitfalls

• Under-estimation of set-up costs, time and
  resources
• Poor preparation
• Lack of clarity
• Choosing the wrong partner/partnership
• Partners can fall out!

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Value for money - definition

• The optimum combination of whole-life cost and
  quality to meet the users requirements. Value
  for Money is rarely synonymous with the lowest
  price
• (OGC)

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Value for money - challenges

• Were the project objectives clear?
• Were the proper processes applied?
• Was the best available deal selected?
• Will the agreement ensure delivery of the service
  over the project life?
• Is the partnership delivering the expected
  benefits?
• Are changes/variations being well managed?
• (Auditor General, PFI STEPS scheme)

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Value for money - assessment

• Value for money
• the sum of all the qualitative and quantitative
  assessment criteria that derive from the
  objectives and requirements underpinning the
  project, procurement or partnership
• encompasses corporate, service delivery,
  financial, operational and technical criteria
• depends upon sound business case development and
  management

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Property partnerships as a value for money
solution

• Nothing new
• Bournville Village Trust - a collaborative
  public/private partnership in delivering the
  Homes for Heroes post-war reconstruction and
  planning

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LA Property partnerships as a value for money
solution

• Achieving step changes
• Business Process Re-engineering
• Enabling new workstyles and changes in service
  delivery
• ICT and E-government
• Public Access
• Regeneration and economic development
• Teaching/learning/caring/leisure/community
  solutions

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LA Property partnerships as a value for money
solution (contd)

• New accommodation and facilities
• Replacing not fit for purpose accommodation
• Dealing with backlog maintenance
• Ensuring statutory compliance
• Increased capacity, skills and resources
• New skills and expertise
• New ICT and technology
• Access to commercial funding market

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LA Property partnerships as a value for money
solution (contd)

• Releasing value
• Estate rationalisation
• Development opportunities
• Occupancy efficiencies
• Risk reduction

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Channel Tunnel

• Completed 1994
• 55 year concession to Eurotunnel
• 10 contractors
• 220 syndicate banks
• Completed costs 12 bn
• Worlds largest privately financed endeavour

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Channel Tunnel - value for money?

• Asset procured as a concession
• A public infrastructure success, but
• Significant time and cost problems in procurement
• Competitive pressures have not allowed Banks to
  achieve normal return
• A public sector success but a commercial disaster

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South East Essex College

• 26,000m² state of the art College facililty
• PPP deal with Equion
• Property swap with cash top up

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South East Essex College - value for money?

• Guaranteed price for vacated properties
• Guaranteed construction price
• Assured delivery dates (with significant
  alternative provision requirements)
• Public sector wins
• Delivery of objectives
• Greater time and cost certainty
• Innovative design
• Town centre regeneration

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University of Greenwich Avery Hill Student
Village

• First PFI deal in Higher Education
• Carillion operating on 35 year concession
• 665 bedspaces with student support and social
  facilities

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University of Greenwich Avery Hill Student
Village- value for money?

• Asset procured as a concession
• Development cost and operating risks borne by
  operator
• Service levels assessed on quarterly monitoring
  regime
• Public sector wins
• Energy management regime
• Latent defect responsibility
• Food service franchise

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Queen Elizabeth College, Leicester

• Partnership for sports facilities between
  college and Cannons Health Club
• College provides site for sports clubs and
  college sports facilities
• Promoter provides DBFO facility (6 badminton
  courts, sports laboratory and changing
  facilities) for 99 years for college. Operates
  sports club in conjunction

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Queen Elizabeth College, Leicester- value for
money?

• Design, construction, operation and finance risks
  borne by operator
• High quality facilities provided on a serviced
  basis at no cost to the college for 99 years
• A public/private win

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Property partnerships - essential ingredients

• Proper preparations
• Corporate and political buy-in
• Staff and resources
• Baseline Information
• Market understanding
• Clarity and realism
• Clear objectives, requirements and scope
• Genuine partnership approach
• Realistic programme for delivery

25

Property partnerships - essential ingredients
(contd)

• Strong management framework
• Project management
• Decision-making
• Performance monitoring

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Partnerships value for money

• Lis Carter
• Paul Watson
• GVA Grimley