Shared Services Third Sector Project report
A final report for this project was drawn up after a meeting of third sector
organisations in the West Midlands has taken place on June 14 th. At this meeting
they were further consulted about their views on consortia, whether this be a
regional consortium or other smaller sub-regional collaborative groupings
Third Sector consortium formation: what does it take and what are the benefits?
1.
The project
This research forms part of the continuation phase of the Adult Learning Shared
Services initiative. The overall aim of this strand was to find out what are the
benefits of forming a third sector consortium for SFA-funded providers and, if
advantages are found, to start to stimulate the conditions for the formation of a
consortium in an area where none currently exists. We were mindful throughout,
that the options for collaboration are broad, and include a single regional
consortium or (more likely to be popular perhaps) smaller sub-regional collaborative
ventures.
This workstream focused on one geographical area where there is no directly
contracted third sector learning consortium (the West Midlands), and compares the
position there with a region which does have an active third sector consortium with
SFA contracts (the South-West Region). As well as the research, we aimed to
stimulate activity towards the development of a new consortium in the selected
region through demonstrating the potential benefits and steps to be taken to
achieve these benefits.
This research initially focused mainly on Community Learning provision, although
most providers contacted also talked about provision supported by the Adult Skills
Budget. Providers discussed existing collaborations with local authorities, other
third sector providers and with FE sector colleges.
This workstream complements existing funded activity being undertaken by the
Third Sector National Learning Alliance, which is looking at efficiency and
effectiveness in existing third sector shared services.
2.
The context
Review of the pros and cons of collaboration and consortium formation for SFA
provision is a particularly relevant endeavour in the current context, for a number of
reasons including:
 SFA, as party to previous LSIS-managed research into the contribution made
by the third sector to learning and skills, is known to be considering ways in
which such provision might be procured without compromising the Agency’s
exposure to risk
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 Further action to spur third sector involvement in learning and skills delivery
is likely to form part of work being overseen by a newly- formed Third Sector
Strategic Implementation Board, to be managed by NIACE, which meets for
the first time in April 2013
 Skills funding may well in time pass to LEPs, in which case it will be
incumbent on all skills providers to reflect a common and collaboratively
achieved view on local skills priorities
 The Community Learning Trust agenda when rolled out following the pilots
of 2012, will also require providers to take a collaborative approach to
planning and delivery
 The Ofsted improvement agenda, new CIF and short-notice inspection
regime may place pressure on third sector providers, particularly smaller
providers, to get together to pool tools, materials and resources for quality
assurance and improvement, if not delivery as well
3.
The research
The overall aims of this research were:

To map, analyse and report on third sector consortium arrangements in the
south-west

To generate, from this, a rationale for developing approaches to third sector
collaboration, including benefits and any pitfalls

To identify and make contact with third sector learning and skills providers in
the west midlands, and map and assess the extent to which they
have/do/might link with each other to mutual benefit, including an
assessment of any barriers to collaboration

To take appropriate actions towards stimulating the development of
potential third sector collaborative/consortium arrangements in the West
Midlands
The method of research was:
The first stage of the research was to identify third sector organisations delivering
Skills Funding Agency adult learning provision either as main contractors or subcontractors in the two regions. This was achieved through examining the Skills
Funding Agency “Register of Training Organisations” and “Subcontracting Register”.
As the published sub-contracting register only includes organisations delivering over
£100,000 worth of provision, further research was then carried out to identify
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organisations delivering below that level (the majority of sub-contracting third
sector organisations identified were below that level). These smaller organisations
were identified through the OFSTED reports of all of the main contracting
organisations identified in each region. (The “FE Choices” website also provides a
list of contracting organisations broken down by region and type of provider). This
has not resulted in a complete list of sub-contracting organisations, as earlier
OFSTED reports did not always provide this information. Gaps in the information
were filled where possible via email and telephone contact to the main providers,
and by keeping up to date with new OFSTED reports as they are published.
The second stage of activity involved web-based research to identify contact details
for each of the WM organisations identified, and also confirmation of their status as
not-for-profit organisations.
Once a generic contact address for each organisation had been established, an email
explaining the aims of the project was sent, with a short questionnaire, to each of
the identified WM organisations, giving an opportunity to request a telephone
interview if preferred and a deadline for response. A specific email account was set
up for this purpose. At the end of this time, those organisations which had not
responded were contacted again, by telephone. This established the name and
contact details of the most appropriate member of staff to discuss the project with,
and was followed up with a planned telephone call, or an email addressed to the
specific individual, to give them a further opportunity to respond to the
questionnaire with a new deadline date. All responses to the questionnaire, either
by telephone call or by email, were analysed via a spreadsheet to give an overview
of the responses to each question.
Running parallel to this activity, some existing third sector learning consortia around
the country were researched, via website and email contact, to provide an updated
picture of third sector consortia elsewhere.
Initial findings of the research were:
A:
Third Sector Consortia in the rest of UK – a brief overview
Whilst there is by no means a consistent coverage across the country, there
are several examples of very successful third sector learning consortia, which
have developed different services and expertise. In addition to the two
consortia in the South West (mentioned below), these include:
o Enable in the East Midlands, which offers both a contract management
service and development opportunities for its members;
(www.enable.uk.net)
o London Learning Consortium, which is constituted as a Community
Interest Company and as well as training provides a recruitment and
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employment service and management services and also maintains an
investment portfolio; (www.londonlc.org.uk)
o Vola Merseyside, which has over 170 members, 72 of whom have been
involved in the delivery of consortium contracts. The consortium has won
£6.5m in learning and skills contracts, and also supports workforce
development for Third Sector employers; (www.volamerseyside.org.uk/)
o Your Consortium, North Yorkshire, which has grown out of the North
Yorkshire Learning Consortium and has secured over £4 million of new
money for voluntary sector delivery in 3 years;
(www.yourconsortium.org/)
o Derbyshire Learning and Development Consortium, established in 2000
to support Voluntary and Community Sector organisations across the
county to develop and deliver high quality learning and development
opportunities for their staff, volunteers, clients and learners; DLDC is
currently working closely with Derby City Council, and is a formal
Community Learning Trust Pilot. (www.consortium.org.uk)
B:
Successes and Challenges for consortia:
Derbyshire Consortium’s Chief Executive responded to our research citing
changes in contracting and commissioning practices, along with
improvements in information sharing and communication amongst
consortium members, as key drivers in the success of the consortium. He
identified the continued need to secure resources to develop organisational
infrastructure and maintain operational competence as one of the main
challenges facing the consortium.
C:
The baseline: characteristics of South West
See the comparison table in Appendix. Research identified 89 third sector
organisations delivering SFA funded adult learning in the SW region, of whom
9 were main contractors. This includes two third sector learning consortia
(Learning Curve and Learning Plus (V Learning Net)) which hold main
contracts with the SFA. Approximately half of the sub-contracting
organisations were sub-contracting via one of the two consortia. (NB
organisations were frequently sub-contracting to more than one main
contractor). 17 organisations were identified as sub-contracting to colleges,
and 38 to Local Authorities.
D:
Characteristics of West Midlands (to compare)
See the comparison table in the Appendix. It was noted that whilst the two
regions vary greatly in terms of social, geographic and economic indicators,
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the population sizes are comparable. Research identified a similar number of
third sector organisations delivering SFA funded adult learning in the WM
regions (83), of whom 10 were main contractors. There is a consortium of
organisations (now known as BCTG, which was established in 1999, initially as
a Network for Black Country Providers) delivering training in the region. But
although this is technically set up as a third sector entity, it does not
predominantly consist of third sector providers and does not identify with the
third sector. The number of organisations identified as sub-contracting to
colleges was the same as in the SW (17). Substantially more organisations
were identified as sub-contracting to Local Authorities (56). It was noted that
8 organisations identified as having previously delivered SFA funded adult
learning were no longer doing so.
Nineteen organisations in the WM provided more detailed information about
their provision. Contract sizes of respondents ranged from £10,000 to £1.5
million per annum, with the majority delivering small amounts of funded
learning (less than £40,000 per annum). (See analysis of responses in
Appendix).
E:
Existing collaborations in West Midlands
The following examples of existing collaboration were identified through
the research and/or mentioned by respondents to the questionnaire:
o There is an existing consortium of providers in the region (BCTG). This
is constituted as a not for profit organisation but whilst some two or
three of the member organisations appeared to be third sector, none
of these were identified as currently delivering as sub-contractors to
this group
o Councils for Voluntary Service (CsSV) in Staffordshire have set up an
organisation to deliver third sector training through a variety of
different contracts. (The Staffordshire & Stoke-on-Trent Consortium
of Infrastructure Organisations (SCIO) Training/Skillbase)
o In Shropshire a new voluntary sector provider consortium has been
set up as a result of collaboration through the Voluntary Sector
Assembly. The consortium is multi-themed but includes education
and employment. The consortium will bid on behalf of members for
public sector contracts. The consortium manager would be
interested in discussing how they could work with a regional learning
consortium
o In North Worcestershire third sector organisations participate in
CROWN (Community Regeneration Organisations Worcestershire
North)
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o Although not a designated as a formal pilot area, Staffordshire is
setting up a Community Learning Trust, which the voluntary sector
has been very involved with
http://www.communitylearningtrust.org.uk/
o Birmingham has a Community Learning Trust pilot headed by
Birmingham Adult Education Service: http://birminghamclt.wordpress.com.
The CLT is seen as a ‘significant opportunity to develop community
learning in new ways, target those at disadvantage, lever in new
sources of funding and work with other agencies to maximise the
impact of Community Learning funding. Health and well being is a
specific theme in the CLT pilot , and there is a focus on community
learning in 3 areas of the city – West Northfield, Shard End and Ward
End.’
o Other local collaborative arrangements were reported such as
thematically based groupings around health and children’s services.
These kinds of collaborations are the norm in public health and
children’s services, particularly for example since the Sure Start
Children’s Centre initiative stimulated the development of multidisciplinary teams focussing on a parent-centred casework approach.
As they are not collaborations around SFA funded provision they are
outside the scope of this research, though they do demonstrate that
where policy initiatives promote collaborative activities, they tend to
happen more readily.
o In several parts of the West Midlands, third sector providers subcontracted by local authorities reported that they appreciate support
through individual contract management and regular provider
meetings. In particular, Herefordshire Adult Learning was described
as a “mini-consortium” with excellent support
F:
Perceived potential benefits of collaboration (from responses to
questionnaire in West Midlands)
o Competition with existing providers (eg in a local NEETS consortium
where the college handles allocation of starts, a third sector
organisation only received 9 enrolments across 3 centres).
o Profile raising (eg with other public sector agencies such as Job
Centre Plus)
o Economies of scale to be gained from bulk negotiating and buying
o Dissemination of information, saving staff time in keeping up to date
with the adult learning agenda
o Sharing resources (eg internal verifiers who are specialized in their
subject area and would also have a knowledge and understanding of
the sector)
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o
o
o
o
o
o
o
o
o
o
o
G:
Access to different funding streams and larger contracts
Security, safety in numbers
Capacity to be able to fulfil large contracts
Capacity-building for smaller organisations to be able to develop their
provision
Flexibility to be able to meet contract requirements
Trust amongst member organisations
Enhanced readiness for emerging commissioning models: social
enterprise, payment by results, social impact bonds
Involvement in governance and decision making
Continuous quality improvements/sharing good practice
Networking opportunities
Membership of successful consortium can be seen as a kite mark of
quality, improving opportunities for bidding to other agencies
Perceived potential dangers /issues to be resolved relating to collaboration
o Some organisations had poor experience of working with FE sector
colleges (in particular) and so were wary of collaboration
o Some organisations were wary of collaboration that may harm their
reputation by association (eg if the consortium does not deliver) and
so need assurance that other members have sufficient delivery
capacity
o Providers expressed concern that they might not have enough
control and choice about criteria for membership, and were
concerned that they would have to work in consortia with partners
they had not chosen to work with
o Need to ensure that management/admin charges are not excessive
o Need to bear in mind costs of collaboration which may not be met by
contract (eg meeting attendance)
o Necessity to adhere to an organisation’s own regulations and policies
as well as consortium requirements, which could cause conflict of
interest or confusion
o Need for approval from Governance/Trustees of each member
organisation signing up to the consortium
o Risk of double funding where organisations have contracts or subcontracts with other agencies, giving rise to a need for internal and
external clarity and transparency about which provision is being
funded by which funding stream
o Issues needing to be examined around protecting an organisation’s
own developments in learning: this may include confirmation that
there is shared expectation and understanding about priorities and
focus, eg that learner needs come before organisational benefit.
H:
Themes arising from West Midlands responses to questionnaires and
questions raised by these
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Themes arising from West Midlands
responses to questionnaires
Of the organisations which responded, 6
would definitely be interested in being
part of a third sector consortium, and a
further 9 would possibly be interested.
Questions raised including any gaps in
research and ideas for what could still
be explored
If the steering group moves ahead with
further plans to stimulate a learning
consortium, some organisations which
have not responded to the research
may wish to be involved
The level of interest in a potential third
sector learning consortium varies
depending on whether organisations are
currently directly contracting or subcontracting, and who their sub-contract is
with. In the main, those organisations
with main contracts chose not to respond
to the questionnaire.
If the steering group moves ahead with
further plans to stimulate a learning
consortium, some organisations which
have not responded to the research
may wish to be involved
Smaller organisations with single
programmes/small numbers of learners
are generally happy with existing
subcontracting arrangements with the
Local Authority. These organisations are
not looking to change this arrangement,
although some mentioned an awareness
that this may change in the future with
changes in regulations and possible cuts
in Local Authority adult learning
departments.
Smaller organisations would appreciate
being kept in touch with any
developments, even though they are
currently happy with their arrangement
Some medium to larger organisations, or
those with multiple programmes and
multiple funding streams, would be
interested in discussing alternative
funding arrangements and/or
collaboration. The research identified a
number of organisations that are actively
seeking out different funding streams to
meet the needs of their learners. This
group would be prepared to look at
innovative ways of working and
collaborating to develop their provision
This group would be key to include in
any potential further work towards
collaboration
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Themes arising from West Midlands
responses to questionnaires
The research identified some
organisations which are not currently
delivering SFA funded learning, but have
done so in the past and would be
interested in alternative funding sources.
In some cases their cessation of past
contracts may be due to lack of sufficient
capacity to comply with funding
requirements, but in one case the
organisation is already delivering Job
Centre Plus provision, and SFA provision
would seem to be a complementary
addition
Questions raised including any gaps in
research and ideas for what could still
be explored
This group should be included in any
further discussion about potential
collaboration
A need to be clear about membership
criteria was identified. Respondents
wanted to know if the consortium
would be open to all third sector
organisations even if they were not
currently in a position to deliver funded
learning
Many of the difficulties experienced by
organisations acting as Local Authority
sub-contracted providers are related to
issues with the funding structure (funding
rules) not the Local Authority contract
administration. In particular,
organisations reported issues with
restrictions on further sub-contracting,
and difficulty with funding being unsuited
to learner needs. In some cases provision
had ceased because organisations are no
longer able to sub-contract provision to
tutors
Issues caused by funding rules are
unlikely to change as a result of a third
sector learning consortium. However, it
could be an opportunity to capacity
build organisations to be able to take on
provision previously subcontracted
(subject to funding being available for
capacity building support).
Organisations delivering Adult and
Community Learning (ACL) provision as
sub-contractors reported that they do
not have access to any funding to support
learners with various needs (eg additional
support with literacy, or needs arising
from disability)
Clarification needed as to whether
collaboration could provide a route to
access to additional learning support
Organisations in rural areas reported
difficulty in running viable classes. At the
same time they are conscious that
learners are missing out on any learning
at all, as the cost of travelling to colleges
in larger towns is prohibitive – a factor
highlighted in recently published
BIS/DEFRA research on community
learning in rural settings
Some respondents speculated whether
in rural areas economies of scale could
be achieved by collaboration, and
whether additional funds could be
accessed to support delivery of learning
in rural areas
Organisations reported that funding for
their learning activities is decreasing. For
example, in some cases the value of
Service Level Agreements for the delivery
of Adult and Community Learning
provision has not increased in 4 years
If discussions about collaboration are
taken forward, arrangements for
administration and management fees
should be clarified. Providers were
interested in whether consortium
members would have an opportunity to
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Themes arising from West Midlands
responses to questionnaires
although costs of rent, tutors etc have
increased. Others reported that funding
is moving to a “per learner”
arrangement, rather than covering the
cost of venue and tutor: this will have the
effect of shifting the risk of a funding
shortfall from the main contractor to the
subcontractor
Questions raised including any gaps in
research and ideas for what could still
be explored
discuss and agree level of fees. This
indicates that providers would need
help in developing a Common Accord,
which would be expected by SFA and
which would require transparency
about any top-slice
One organisation delivering NVQs to its
staff under a college sub-contract
reported that the effect of co-financing
for qualifications has resulted in a 50%
cut in funding
If discussions about collaboration are
taken forward, arrangements for
administration and management fees
should be clarified. Providers were
interested in whether consortium
members would have an opportunity to
discuss and agree level of fees. This
indicates that providers would need
help in developing a Common Accord,
which would be expected by SFA and
which would require transparency
about any top-slice
Some organisations see their provision as
too small to warrant discussing
collaboration
They might still want to be involved and
kept informed
If a consortium existed with some
support/capacity building provision,
smaller organisations might be
supported to participate.
Size and geographical reach of
consortium is of interest, as it is
recognised as important not to lose
understanding of the local area, but there
is also awareness that entities need to be
large enough to bid for contracts. The
newly formed Shropshire Providers
Consortium reported that they had
already identified a need to be working
regionally to be able to bid for some
contracts.
It was suggested that any consortium
would need to be broad-based to be
effective (in remit as well as
geographically) - for example, seeking to
contract with Job Centre Plus as well as
with the Skills Funding Agency.
The spread of responses appeared to
lack information from the
Birmingham/Black Country area, with
more interest being shown in shire
areas.
It would be important that the
consortium has roots in the region, even
if it is linked to an existing consortium
from outside the West Midlands
.
The gap in information on Birmingham
could be followed up more closely
through contact with the local VCS
infrastructure agencies, and the
Voluntary Sector Assembly champion
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4.
Conclusions and recommendations
A difference between the south-west and the west midlands would appear to be the
existence in the south-west of large third sector main contractors with a strong
strategic aim to develop and support their subcontractors. The scope of this
research did not make it easy to work out historically why no such large provider
has not developed in the west midlands, but we certainly found that none of the
existing sub-regional collaborations in the west midlands are of the scale of those in
the south-west. Other differences between the two regions are that the west
midlands is more industrial and urban, though with some rural areas too, while the
south-west is geographically larger, and more rural. Further work would need to be
done to identify the significant differences between the third sectors in these two
regions, and indeed any distinctive features of the third sector in the west midlands
which makes it different from other areas where we have identified strong third
sector collaborations.
What we have been able to focus on more readily in research of this small scope
and scale is, empirically, what third sector organisations think about collaboration,
and how they generalise from their past experience and perceptions of
collaboration.
The themes and questions arising out of this are listed earlier in this report and
indicate that in the west midlands region there is a lack of evidence and role
modelling of how a successful third sector consortium works. There was a fair
amount of negative feedback about collaborations with FE colleges and these were
often taken as a reason not to try to work together in any way. Organisations simply
do not seem to have seen a successful consortium working well to the benefit of the
providers – in contrast to the south-west, where the Learning Curve works
successfully with over 45 third sector sub-contractors, who clearly see an advantage
for themselves and for learners in this arrangement.
It is certainly true that if not convinced of the benefits of forming a consortium,
third sector organisations in the west midlands will not do so. In order to stimulate
further interest in consortium formation in the west midlands therefore, it looks
from our preliminary work that the following would be useful ways forward:
 Convene a meeting of all third sector SFA-funded providers in the west
midlands with the aim of sharing the initial findings of the research and to
suggest a way forward to start to form one (or more) consortium
 This meeting would need to include a strong component outlining the
benefits of consortium formation as identified by third sector consortium
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members in the south-west and other areas where successful consortia
operate

At this meeting, further consultation could take place about the pros and
cons of consortium formation, and the responses can be incorporated into
the final summary report of this project
 At the meeting it may be possible to set up some ongoing networking
possibly leading to eventual consortium formation, which could be the
subject of some preliminary work prior to the meeting
Appendices to be attached
1.
2.
3.
4.
5.
6.
List of organisations consulted (Excel mastersheet)
Analysis of responses (we need to ask for respondents’ permission to
publicise)
Comparison table SW-W. Mids
Questions we asked them in email and follow-up call
Link to Tim’s paper
List of useful people to contact
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