Case Studies | Anderede

Government’s Transforming Rehabilitation (TR) programme part-privatised probation services in 2015.

Ingeus, through the Reduced Reoffending Partnership (RRP), a joint venture with two third sector providers, operates two large probation contracts in the Midlands, employing over 1,000 staff and managing about 15% of the national caseload.

TR was a huge and ambitious transformation programme introduced alongside sentencing reform and seeking to refocus probation services toward rehabilitating offenders and reducing reoffending rates. Systems wide challenges with IT systems, volumes and the complexity of the newly designed payment mechanism led to significant underfunding of the contracts.

Anderede was engaged in late 2016 to provide commercial support to RRP in forthcoming discussions with the Ministry of Justice to address the weaknesses in the contracts and to help negotiate additional funding so that losses under the contract could be mitigated and assure the continuity of essential services to vulnerable Service Users.

The negotiations occurred in several phases and over a period of 30+ months Anderede led or supported activity across a number of areas including:

Negotiation of a settlement for delays to the delivery of essential IT systems from the MoJ
Management of financial forecasts and returns to the Authority’s external auditor to underpin changes to the “fixed” part of the payment mechanism
Development of whole of market analysis on the Payment by Results (PbR) part of the payment mechanism
Detailed negotiation on the terms of two separate settlements which together reduced potential losses by more than £100m.
Development of transformation business case to reduce support costs for the business
Support to RRP and Ingeus CFOs on development of financial forecasts for Information Memorandum
Development and negotiation of investment cases with MoJ to preserve and enhance services provided beyond contractual obligations
Market engagement support to Ingeus’ business development team for second generation contracts.

“Over the last two-plus years, Anderede has provided clear financial and commercial insight to Ingeus and RRP, leading commercial negotiations with the client and materially helping to ensure the financial viability of RRP’s mission critical probation contracts” – Jack Sawyer – CEO Ingeus

The Money and Pensions Service (MaPS) has a remit spanning financial information, guidance and advice, including pensions and debt advice for the UK. It is the biggest funder of free debt advice in England. The demand for debt advice exceeds supply and debt advice funding comes from a range of sources, all of which are under financial pressure. MaPS policy leads working with stakeholders across central, devolved and local government were looking to develop a sustainable future funding model for debt advice.

Anderede was engaged following a mini-competition under the CCS Management Consultancy Framework Two (MCF2) to analyse current funding and develop financial models for a shortlisted range of theoretical future funding models to inform the policy making process.

To win this contract against the big four consulting firms, we teamed with longstanding partner 4OC who provided PMO and business analytics support and assembled a core team of six experienced subject management experts. Key deliverables included:

An extensive stakeholder review (including within MaPS, FCA, Insolvency Service, Treasury, devolved administrations and charitable and commercial debt advice providers) to understand the current funding and delivery models in greater detail and the appetite / ambition for each of the identified theoretical options.

A baseline financial model of existing provision building on previous analysis and uncovering hitherto unappreciated levels of funding for some “customer pays” solutions such as IVAs.

Projections of future funding over a 10-year timeframe accounting for envisaged policy interventions (e.g. sDRP and Breathing Space), their potential impact on existing delivery and funding and potential channel shift enabled by technology development

A configurable funding model capturing the elements of each of the policy options and their evolution over time.

The brief was quite open given the wide range of policy options under consideration and the requirements naturally evolved as the project progressed. As examples:

Anderede provided MaPS colleagues with additional insights drawn from analysis of detailed MI provided by commissioned debt advice providers

We engaged with key influencers in the gambling industry to explore the hypothecation of part of a gambling levy to fund debt advice

We estimated the size of the market for IVAs and developed an outline business case for securing a sizeable funding stream from a MaPS endorsed IVA.