Northern Ireland Presented by Gurbux Singh & Martin Eves 16 October 2012
Who are we? • Serco is a global 100 FSTE public services company with 50 percent of business outside of the UK • We work for national and local government across public services in health, education, transport, science and defence • 50 years' experience of helping our customers achieve their goals • We run: • Prisons • Railways • Electronic Monitoring • PECS • Immigration • Leisure • Defence • Health • Education • Environmental Services • BPO • Transportation • We work with Governments: • UK • European Union • US • Australia • India • Africa
Serco Ireland Presence & Capabilities • Integrated Facilities Management including: • Belfast Roads Service • State Street Bank • Pfizer Ireland • Deloitte Ireland • Invest Northern Ireland • Retail • Aldi Ireland – Facilities Management Contract • Boots Retailers – Hard Services Facilities Management • Northern Ireland Civil Service – Cleaning & Catering Services • Northern Ireland Water – Water Quality Sample & Transport
Welfare Services Overview • Entered in to welfare-to-work market October 2009 through FND • Introduced a new model of delivery with 100% subcontracting • Delivered 25,000 people in a year in to work • Entered Work Programme supporting 45,000 long-term unemployed individuals • Outcome based contract with approximately 40 subcontractors • We also deliver two NOMS and ESF Contracts
Key Features of Serco Model • Service Integrator • Prime / subcontracting • 100% supply chain management • Combined strength of 100 FSTE company with expertise of local providers and key stakeholders • Build a network with a wide range of providers including – Voluntary third sector, charitable, private and public organisations • Payments by results, outcomes focused • Front loaded payment method to ensure case flow to the supply chain • Building capabilities and capacities • Open and transparent • Single case management system • Invested in an IT Solution to actively support our supply chain • Three phase delivery model • To enable change and to support our customers • Encouraging competition at local level
Key Features of Serco Model • Quality • Provide assurances to DWP, Risk management methodology, Quality Improvement Framework • Evaluating provider processes • Project management of all audits • Market share shift • Compliance • Protection of the public purse • Prevent and detect inaccurate performance • Minimise the risk of fraud • Integrity of data • Information Security • Protection of DWP data • Support the network with information security matters • Report all breaches to DWP
Welcome Direction of Travel – DEL NI • Focus on employment outcomes rather than prescribed processes • Target those most in need • Create stronger incentives for helping those participants who are further from work • Ensure that participants get the support they need • Deliver value for money for the taxpayer • Reduce prescription for providers • To build the right market for the future
Shifting Dynamics of Service Procurement • Steps 2 Success is a procurement that is different to the shape of existing delivery models: • Milestones are changing; • Geographies are increasing; • Diversity of service delivery will be enhanced; • Innovation will be pivotal to success. • All of this means more pressure on working capital: • Revenue streams are pushed to the right; • Investment in solution and delivery methodology is required.
Moving Towards Payment by Results As services providers we face new challenges: • Uncertainty: • Payment is based on future performance; • Little or no performance history; • Future economic activity is unknown. • Risks: • There will be a funding gap; • If we don’t perform the gap will widen; • How do we know our forecasts are correct? • Structure: • Business might not be set-up for the change; • Working capital (and access to it) is critical; • How long since we really addressed our overhead?
Payment From Future Milestones – Cashflow Management is Critical SUSTAINMENT SUPPORT OVERHEADS START FEE JOB START START FEE MEETINGS SUPPORT OVERHEADS CASHFLOW INTERVIEWS TRAINING TRAVEL OVERHEADS 0 TIME
Payment From Future Milestones START FEE CASHFLOW JOB START INTERVIEWS TRAINING TRAVEL OVERHEADS SUSTAINMENT MEETINGS SUPPORT OVERHEADS 0 TIME
Addressing These Changes • Good News: • There will be funding albeit a different nature; • We will have time to deliver; • Milestone recognition gives us more opportunities to achieve; • Upfront service fee or engagement fee will help; • Over achievement will be incremental. • But we MUST: • Innovate our solution; • Deliver performance; • Look at new sources of funding.