PUBLIC SECTOR
JOINING FORCES
Councils can save money by working together on a joint procurement process. So why doesn’t it happen more oſt en, asks Capita Symonds’ Chris Marriott
trim, and they let me borrow stuff from their tidy garages. A pleasant fi ve-minute conversation while unloading the shopping from the car is one thing, but would I want to go on holiday with them? No thank you. I don’t know them well enough to risk it. What if they become terrible bores after that untested fi ve-minute threshold? Two weeks would be too long to take, and our neigh- bourly relationship could be badly affected in the long term. So why is it that some coun- cils choose to work with their neighbours for up to two years at a time?
M As I’ve banged on about
recently, councils are increas- ingly looking to outsource the management of their leisure facility portfolio. They can either procure an operator themselves, or (as in the case recently of Guildford & Woking, and Charnwood & Melton) they can procure their opera- tors jointly. We call this, with beautiful logic, “joint procurement”.
They seem to want to work together for two commendable reasons. Firstly, it’s as part of some greater strate- gic, synergistic, joined-up goodness. Secondly, it’s to save cash. They can save this cash in two ways. Firstly by shared advisory costs through shared meetings and joint drafting of procurement documents. Your lead advisors (who, by the way, it is essential you appoint jointly) will act as your single point of communication to the operators Secondly, by getting a better deal from a leisure operator in recognition
ISSUE 4 2011 © cybertrek 2011
y next door neighbours on both sides are really nice people. They keep their cars clean, their lawns
of the fact they can bid for two con- tracts in parallel and, if they win them both, may operate them together over the same term.
Bidders will be more interested in a
larger package. All facilities included in the procurement process are con- sidered to be one package for the purposes of the mechanics of bidding for them, regardless of whether they are owned by Council 1 or Council 2. It’s important to note that while the councils will be jointly procuring their operators using the same proc-
While the councils will be
jointly procuring their operators using the same procurement process, they will have their own separate contracts and can appoint diff erent operators
ess, they will have their own separate contracts and can appoint different operators. One council is not unduly infl uenced by the other’s preference. This is important as a bidding opera- tor may offer a decent price to Council 1 but a derisory offer to Council 2. To compel Council 2 to appoint the same operator just wouldn’t work. With the cost benefi ts of joint pro-
curement, why are there so few out there (two to be precise)? Well, a suc- cessful joint procurement depends on a number of factors all coming together in perfect alignment. For starters, both councils must be ready to do it at the same time. They need to ensure their decision making and approvals processes are
more or less similar – to avoid one council delaying the other. They should be next to each other geographically, or thereabouts, and have more or less the same view of the leisure world and operate demo- graphically in similar catchments Most councils like to think their patch is unique, meaning their facil- ity needs a very different management approach (which is perhaps why so many are still managed in-house). But when you’re looking to partner an operator, the main consideration should be whether what they are proposing to do - and how they do it - is likely to increase usage at your facility and therefore reduce its net operating cost. The chances of these four fac- tors aligning at the same time in the local authority world are as remote as a total solar eclipse (the next one, by the way, is due in about 80 years’ time). Councils will also need to con- vince the advisory and operator worlds of their similarities. The risk is that the councils fi nd they don’t get on, and the whole thing comes to a halt, jeopardising both councils’ chances of getting what they want. But councils, don’t be put off. If you can stand it, it’s worth it fi nancially. You’re only going through the procure- ment process together (which should take no more than a year); you’re not forever tied together for the duration of your contract terms.
It’s the equivalent of sharing a taxi to the airport with your neighbour. When you get there, you take your own fl ight and enjoy your own holiday in peace. Have a nice trip. ●
Chris Marriott is an associate director at Capita Symonds
Read Leisure Management online
leisuremanagement.co.uk/digital 51
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