Evidence submitted by PricewaterhouseCoopers
(Def 59)
INTRODUCTION
PwC's UK Business Recovery Services (BRS) practice
is the largest in the World, providing a range of advisory and
insolvency services to lenders, creditors, companies and individuals
in troubled financial situations.
In the UK we have 900 partners and staff operating
out of 22 offices.
The Practice provides the full range of services
for underperforming businesses, public sector bodies and their
stakeholders including the management of crisis, the implementation
of turnaround and advising lenders, creditors and businesses of
all sizes ranging from owner-managed mid-market businesses to
multi-national organisations.
The Corporate restructuring team works with
the management of underperforming businesses and organisations
to stabilise them and turn them around. It supports such organisations
by improving cash management, regaining control of the organisation
and developing a platform for future stability or growth.
The Corporate Restructuring team within PwC's
Business Recovery Services practice is lead by Kevin Ellis, a
PwC partner.
Kevin has specialised in providing turnaround
and restructuring services to underperforming businesses and organisations
in the public and private sectors for over 18 years. Kevin has
extensive experience in turnaround situations, working with stakeholders
in developing innovative, constructive and commercial solutions
for underperforming organisations. Kevin often takes on a role
of coaching and mentoring senior management during the process
so as to bring about long term sustainable improvement.
PwC is able to draw upon a unique resource of
over 150 Turnaround Directors from its Turnaround Panel, who can
be placed at short notice into troubled situations. The PricewaterhouseCoopers
LLP Turnaround Panel is made up of independent Turnaround Directors
who have a proven track record of turnaround that can be placed
into executive positions to provide hands-on leadership in distressed
or underperforming businesses. Turnaround Directors from this
Panel have been introduced into middle-market, public sector and
high profile rescues.
The members of the PwC Turnaround Panel are
typically experienced senior executives from a wide variety of
backgrounds. The common theme is that these executives have "done
it before", bringing their sector and situational skills
to bear rapidly and effectively on a distressed situation.
Panel members can fulfil a wide range of roles
including Chief Executives, Finance Directors, Chief Restructuring
Officers, functional directors/managers and executive/non-executive
chairmen. A rigorous selection process is employed, involving
interviewing and reference checking to ensure consistency of quality
of Turnaround Directors. They have no subsequent contractual relationship
with PwC and the final decision to utilise their services in Turnaround
situations will be taken by the client or other stakeholder.
RECENT TURNAROUND
ACTIVITY IN
THE NHS
1. National Programme Office ("NPO")
for turnaround
Following the analysis of those Trusts/PCTs
with the largest deficits performed by KPMG (Project Sands—baseline
assessment) in late 2005/early 2006, PwC were invited (along with
the other Big Four firms) to tender to provide a structure for
and support to the National Programme Office for turnaround (NPO).
PwC were successful in this competitive tender
and as a result have secondees working for Keith Davies, an independent
Turnaround Director who heads up this team and reports to the
DH Turnaround Task Force chaired by Richard Gleave of the DH Recovery
and Support Unit.
The role of the NPO is to ensure turnarounds
were rigorously planned and executed whilst ensuring there is
a real time sharing of best practice and knowledge.
2. SHA Turnaround Directors
As part of the infrastructure to support the
delivery of turnaround, private sector Turnaround Directors were
appointed to each of the 11 SHA Transitional Patches to support
the Transitional Leaders in managing their turnaround organisations
and to act as the interface with the NPO. In each case local
NHS management had the final say on their appointment.
Following a request to Deloitte, KPMG, Ernst
& Young and PwC for CVs of experienced Turnaround Directors
who were ready for immediate deployment, 10 Turnaround Directors
were chosen from a selection of CVs provided by PwC.
The remaining Turnaround Director is a PwC employee
and Director who with over 10 years of turnaround experience who
had been on secondment to the Department of Health since May 2005
working in the Performance Support Team and in November 2005 was
subsequently deployed into a SHA Turnaround Director role by the
DH (whilst still on secondment).
3. Turnaround Support in Turnaround Cohort
Trusts/PCTs
The baseline assessment (Project Sands) of the
financial position of 98 organisations within the turnaround cohort
highlighted that a significant number of these organisations were
projecting a budget deficit during the same financial year and
therefore required cost improvement/recovery plans in order to
return to financial balance. The review also included the categorisation
of Trusts and PCTs in terms of their likely turnaround support
requirements during business recovery. Those categorised as 1
or 2, in particular, were recognised as requiring external support
and assistance in order to develop robust and credible turnaround
plans.
Following the baseline assessment, PwC have
been invited by various Trusts and PCTs in the cohort to competitively
tender for the provision of a range of turnaround support. PwC
have as a result provided support to over 20 organisations within
the turnaround cohort as well as a number of other Trusts/PCTs
(outside of the cohort) who have independently recognised the
need for external support and invited tenders.
The assignments undertaken have varied in size
but generally take between six to eight weeks during which the
PwC team work closely with all staff within the relevant NHS organisation
in the development of a robust turnaround plan. This involves
empowering and working with the clinical staff. In most cases
initial ideas for recovery plans are generated by clinical and
management leaders within the organisations themselves, the job
of the advisory teams is to work these ideas into detailed, executable
plans.
We are confident that we are making a key contribution
in supporting Trusts achieve sustainable financial improvement.
PricewaterhouseCoopers
June 2006
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