Clubfinance provide consultancy support to restructuring of public services and outsourcing ranging from health to probation. Complex projects take a variety of different structures and we use financial models to make sense of each project we work on. We pride ourselves on producing simple, transparent models that are easy to understand. We then deliver on our client’s goals using a wealth of financial and commercial expertise.
Austerity continues to drive the public services agenda. Technology and new approaches to service delivery, however, offer the prospect of delivering more relevant services at a cost point not previously available. Doing so demands a very different approach from service providers and commissioners.
Contracts for public services have traditionally been centred around the commissioner-provider relationship, not the citizen. Citizen-oriented approaches, offering self-referral using widely accessible technology, can significantly reduce access costs while increasing engagement. Similarly, workforce management can be lightened in ways that suit professionals, where flexibility and control are important drivers.
Successful investing requires successful, sustainable, enterprise. Successful impact investing demands nothing less. In our experience this needs a suitable route to invest, coupled with a viable investment.
Investors have shown strong uptake in listed Retail Charity Bonds, but with only 3 issues in the last two years, supply has been weak.
Social Investment Tax Relief (SITR) offers another investment route to debt and equity, but while State Aid issues remain unresolved – notwithstanding Brexit – the deminimis level of €344,000 severely limits investor uptake. Given its similarity to EIS, which raised over £1.5bn for the last reported year (2013-14), we will continue to track how SITR develops.
Payment for Outcomes has been enthusiastically adopted by parts of the public sector, under which it contracts for, and pays others, on the basis of achieving outcomes, rather than for merely processing citizens.
While its ability to align incentives between commissioners, funders and service providers is a powerful tool, progress has been held back by a patchy evidence base, a bespoke rather than standardised approach to contracts and a reluctance to allow service providers to bear full risk, reflecting concerns over prime contractors' previous treatment of risk through their supply chain.
Standardised contracts and a consistent approach to collecting and measuring evidence would provide a strong foundation to investor take-up at scale.
With a £40bn programme to support infrastructure through the issue of sovereign guarantees and a programme of co-investment in infrastructure through programmes such as PF2, LIFT and agencies such as the Green Investment Bank, the UK Government has a need to monitor guarantees issued and investments made.
Clubfinance have advised on a variety of projects with public sector co-investment and / or guarantees.
We have recently been appointed by the Cabinet Office as a Corporate Finance Adviser, achieving maximum possible score in doing so.
Clubfinance's skills and experience in relation to bidding and investment, along with the fund management expertise of our affiliate company, Amberside Capital Ltd, are particularly suited to assisting ambitious social sector organisations who wish to build scale and increase their involvement in government contracts for public services.
In partnership with public services provider Interserve, and social business Catch22, in 2015 we were chosen by an expert panel of innovative business leaders and social entrepreneurs as the inaugural winners of the Big Society Capital's Business Impact Challenge. This challenge was established to find a high-impact investment idea that generates strong business and social value in the UK. The Business Impact Challenge panel assessed ideas from corporates based on their social impact, business model, and ability to deliver.
The value of this idea was further recognised in October 2016 as the Public Services Lab won the inaugural Innovative New Idea at the 5th Finance for the Future awards, founded by the Institute of Chartered Accountants England and Wales and HRH The Prince of Wales' Accounting for Sustainability project.
Our proposal is to create a Public Services Lab - a social business which will support community organisations, charities and social enterprises in ways which will enable them to deliver public service contracts at scale.
Big Society Capital has fully approved its seed £1m investment, premises at Cunard House, Liverpool have been secured and Chair and Chief Executive appointments were recently announced.
"In the current financial climate, it is more important than ever for the voluntary, community, public and private sectors to come together to develop creative solutions to the challenges facing public service provision. We're delighted to have found forward-thinking partners to make this happen. Winning these competitions encourages all of us - Interserve, Clubfinance, Big Society Capital and Catch22 – to press forward on this exciting journey." – Chris Wright, CEO, Catch22
Benenden Hospital Trust, approached us to help secure investment to redevelop its hospital in rural Kent. We were approached to make the case to unlock £50m of investment from its charitable parent, Benenden Society.
We were able to present this investment in a way that was comparable to other investments the Society routinely makes, such as stock market and property investments. This approach enabled the Society to provide full approval.
"Social Investment is a developing area. Encouragingly, thinking on how to invest to both deliver a charity's aims as well as a financial return has moved forward, with new powers in the Charities (Protection and Social Investment) Act 2016." Neil Rutledge, Director, Clubfinance Project Finance
"Appointing Clubfinance to help us access over £50m of charitable funding for our new hospital development was the right choice - they understood our world, suggested ways to overcome issues, and were always responsive." Gordon Boyd - Finance Director, Benenden Hospital Trust
Interserve Investments, a long-standing client, approached us to help it bid to acquire a number government-owned community rehabilitation companies, established to deliver probation services to medium and low-risk offenders.
The Ministry of Justice established a bid budget split between a competitively-bid fee for volume-related services with the balance payable on achieving reduced re-offending outcomes. Working with the service design team, and the policy evaluation research unit at Manchester Metropolitan University, we designed an integrated operational and financial model which built on evidence-based assumptions on how desistance approaches impact on behaviour to provide a framework for making commercial decisions as to the level of outcomes risk assumed.
"Clubfinance combined a highly professional and commercial approach to bidding with a creative flair which enabled this unique project to achieve timely internal sign-off, gain support from our social partners and be fully compliant with stringent MoJ bid requirements. The Clubfinance team never failed to meet tight requirements, demonstrated their ability to anticipate, which I am sure is a reflection of their deep bid experience. Their team were also of great help to us during the mobilisation and transition phases. Their friendly approach and willingness to go the extra mile, made it a pleasure to work with Clubfinance." Yvonne Thomas, MD, Interserve Justice.
Clubfinance are now appointed onto the Crown Commercial Service's Corporate Finance Framework for Infrastructure (RM3719 Lot 6) following a tender which saw us achieve the maximum possible score.
This framework provides a platform through which public sector clients can access our corporate finance services in relation to existing or future infrastructure. We have recently advised on projects in the health, police and justice sectors.
"Getting onto this framework re-iterates Clubfinance's commitment to providing high quality advice to the public sector. The maximum score we obtained represents the attention to detail that we put into all we do and we look forward to continuing this dedicated effort when working with public sector clients under this mandate." - Neil Rutledge, Director, Clubfinance Project Finance