Better Business Models Katharine Davidson Executive Director, Strategy & Management Information Efficiency and Reform Group , Cabinet Office 21 November 2011
What are better business models? HMG owned In House HMG/Member owned HMG/Member/ JV owned Outsourced Private owned Service contract Privatise Each model has pros and cons, but overall we are agnostic. Pragmatic judgement on merits, though understandably there’s interest in mutual principles
How do they support HMG Goals? HMG Goals Efficiency and Reform Agenda Transparency Digital Open Public Services Growth Reform Deficit Reduction Efficiency Better Business Models Aggregate Procurement Supplier Management Spend Controls
“Mutuals” offer attractive benefits: • Better value • Better service post-deal • Ownership stake protects taxpayer • Hedge poor initial contracts Employees Mutual principles Taxpayers • Greater engagement • Ownership stake • Freedom to innovate & improve citizen services • Opportunity to grow through provision of capital or expertise External partner + Support SR reductions with at least 34% cost reduction + High quality services enabled by private sector investment of capital and expertise + Community benefit unlocked to ensure local people benefit + Performance Management rigour + Service & Incentive culture
Better Business Models Efficiency • Business Models must lower Costs Better Business Models Growth Reform • Approach with zero-base mentality • Transformational • Close Productivity Gap • Agnostic about types of models. • Diversity of providers. • Create new companies. • Greater transparency. • Create new companies • Unlock barriers to growth
Rallying Cry: Where Next? Our next steps for early 2012: • Recruit head of Commercial team • Complete Phase 1: My. CSP • Develop Phase II pipeline with industry • Create forum for pro-active industry engagement What can you do? • Find out more at one of the breakout sessions today • Develop specific ideas and share them with us • Offer us frank feedback on the policy & execution
Better Business Models Katharine Davidson Executive Director, Strategy & Management Information Efficiency and Reform Group , Cabinet Office 21 November 2011
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