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Joint Venture secures council services and jobs
Facilities Management provider Norse Commercial Services has formed a 10-year partnership with Devon County Council that is being hailed as a "winning combination" for cleaning and catering at the county's schools and civic buildings.
Under the arrangement, staff currently employed by Devon Cleaning & Catering Services (DCCS) will transfer to a new Joint Venture company owned by Devon County Council and Norse Commercial Services.
The new company, called Devon Norse, took over responsibility for delivering cleaning services to schools, various NHS sites and civic buildings from1st June, 2011.
Catering at 220 of the county's schools will be transferred to Devon Norse from the start of September 2011.
The deal is the latest of Norfolk-based Norse's groundbreaking local council partnership agreements and is described by the partners as "good for Devon and good for Norfolk".
Owned by Norfolk County Council, Norse Commercial Services already operates partnerships with a number of local authorities, including Great Yarmouth Borough Council, Waveney District Council and Enfield Borough Council. Norse's Devon deal will see the Norwich-based venture expanding well beyond its East Anglian heartland.
Under the terms of the £11-million-a-year arrangement, Norse will use its commercial expertise to deliver a range of outcomes defined in Service Level Agreements, raising standards and reducing costs. A percentage of any profit realised from procurement economies of scale, overhead reductions and operational efficiency improvements will also be returned to Devon County Council.
Norse managing director Peter Hawes says that the company's years of experience in delivering high quality services, efficiently and cost-effectively, while also providing positive financial return to local councils, would mean real benefit to the service users and taxpayers of Devon.
Around 1,500 management and staff currently employed by DCCS will transfer to Devon Norse under a TUPE arrangement, ensuring stability for the local workforce.
Three options were initially considered: the status quo (continuing with the in-house DCCS operation), tendering for all services, or partnering with a services supplier. Stopping the services was also considered but dismissed early on.
By May 2010, the tendering approach had been rejected and presentations were sought from a private sector organisation, the DCCS team and Norse - with its public-private sector status and JVC experience.
Over 100 stakeholders reviewed and voted on each of the proposals. Staff issues, such as continuing to offer the local government pension scheme, and the proven efficiencies of a stable workforce, were assessed alongside operational experience, innovation, flexibility and process monitoring systems. Norse's public sector ethos combined with commercial flair proved the firm favourite.
From there, discussions began with Norse to agree the basis for the new Joint Venture company that was to become Devon Norse.
The deal was officially signed on May 23rd in Exeter by Devon County Council's solicitor, Jan Shadbolt, and Norse MD Peter Hawes.
Devon County Council leader John Hart says "We are delighted to be partners in this venture with Norse Commercial Services. It is very important to Devon County Council to have a company with a local base, providing local services and using local suppliers. We believe this winning combination will help to develop the business to everyone's benefit."
As a separate trading organisation, Devon Norse will also be free to tender for private sector and other public sector contracts, both within Devon and outside the county. Norse sales & marketing director Geoff Tucker said: "This commercial freedom will lead to more productive utilisation of resources, create new employment opportunities in the region and increase potential profit share return to Devon council."
Ray Beale, who will be transferring from Devon County Council to become managing director of Devon Norse on September 1st, is looking forward to the role. "This is a very exciting and challenging new venture, and one that provides immense opportunities to ensure high quality services are provided to the communities and residents of Devon," he says.
Norse Commercial Services already operates similar joint venture models with Enfield Borough Council (Enfield Norse), Waveney District Council (Waveney Norse), Great Yarmouth Borough Council (Great Yarmouth Borough Services) and Suffolk Coastal District Council (Suffolk Coastal Services).
In all these partnerships, annual turnover and profit-share returns to the host authorities have steadily increased - experience that should bode well for Devon County Council and its taxpayers in their new venture.
Picture shows: JV agreement being signed by Norse Commercial Services MD Peter Hawes and Jan Shadbolt County Solicitor for Devon County Council
T: Geoff Tucker 01603 894100
14th July 2011