Finally, a win for Boro

In five years, local government long-timers Stephen Stokoe, Doug Grimston and Dave Hodgson have turned a staid council department into a fee-earning business. Hundreds of local government people will be coming here to find out how, because the government has designated Middlesbrough's design services department as a model for every local authority in the country (see box).

Sir John Egan said in his report that the government should be a better client. And so we find Stokoe, head of design services, and his two managers Grimston and Hodgson taking that advice seriously. They look after projects worth £10m or less - schools extensions, libraries, major repair work for clients like local education authorities or NHS Trusts – the sort of projects which many partnering practitioners would say were just too small to make pay. But they do it.

Seeing for myself
Grimston, group leader, building, meets me downstairs at Vancouver House where design services is based. A security guard has replaced the receptionist and contractors are converting the old reception area into more rooms, a money-saving exercise. This is evidence of Middlesbrough Council's corporate commitment to overhauling procurement: a PPP with Hyder Business Services is now running some of the council's services including reception, housing benefit and telephone enquiries.

Grimston, he tells me in his soft Teesside accent, almost apologetically, has always worked in local government in the area. A total convert to partnering, he has been eager to try something different for years; his architects were the first in the council to start using Rethinking Construction KPIs.

Behind his cuddly exterior and his gentle voice there is a tougher side: "I used to enjoy the adversarial nature of being a QS. It was something to get my teeth into." Now it's a great relief to use his years of experience to problem-solve with contractors round the table.

Tough but fair
Grimston is a straight-talker, which is perhaps why I feel surprised when he tells me about his first partnering job: "It was a marvellously rewarding experience." It sounds like hyperbole. But for someone like Grimston, who was involved with a regional Latham working group looking at changing the industry back in 1992, it must have been frustrating to be always working with compulsory competitive tender.

Of interviews for partnering jobs, he says: "You see the whites of the eyes of the lads that are going to do it. You can look them in the eye and know if you can work together."

Middlesbrough awards contracts with quality accounting for at least 50%. It even sets a minimum margin to stop over-eager contractors putting in unrealistic prices in order to get a partnering job on their CV.

Contractors that I contacted say that Middlesbrough's selection system is rigorous but fair. They like the fact that Grimston and his team will sit down with them afterwards if they haven't won a contract and explain in detail the reasons why.

It has long been accepted that partnering is a more rewarding way of working, but how does this translate to 'best value' for a client, I wonder? To find out I go with Grimston, Stokoe and Hodgson to visit Middlesbrough's Dorman Museum and speak to senior curator Ken Sedman.

The Dorman Museum redevelopment, which started at the end of 1999, was Middlesbrough's first partnering job. Grimston's masterstoke was to employ Barnsley chief QS and the Godfather of local authority partnering, Keith Hilton. "Why reinvent the wheel?" asks Grimston "when we can buy the expertise off the shelf from Keith?" This was an unusual and clever step. Like Wates seconding a Wilmott Dixon man as project manager if he happened to be the ideal choice.

The Dorman job came along at the right time. Stokoe et al had something to prove. In 1998 a new chief executive axed one third of the people from the architects and engineering sections, merged the others into design services and told them that they must earn their keep, like fee-earners in a private consultancy.

Pleased punters
Sedman is very pleased with his new extension, which replaced a 1960s monstrosity that was demolished as part of the job. The punters like it too. Visitor numbers have skyrocketed. In seven weeks he has met his visitor target for a year, which at 70,000 is twice what he was getting before the redevelopment.

"I don't think we have had a single bad comment about it," Sedman says, which is unusual, especially since the original museum was built in 1904 in a very different style.

The striking curved façades at each side of the extension conceal a good illustration of a partnering success. The original design had called for curved glass. During discussions, the client asked how much it would cost to replace a broken pane. The answer was "too much" and so the design was adapted to use faceted glass, which as well as saving on future maintenance costs, delivered a £30,000 capital saving, split between client and contractor Miller Construction.

"We got a lot of building for the money," Sedman says. "It's not marble halls, but then again it's only a £3m project. A marble hall would have been half the size."

Radical approach
Next door to the Dorman Museum, in Albert Park, we sit down for a cup of coffee with Stuart Johnston. Johnston manages the park and the visitor centre that houses the little café where we are sitting, next to a shrieking toddler with a plate of chips. The new visitor centre and rejuvenated lake were part of a £4.5m renovation of the run-down Victorian park.

Johnston is sparing in his praise. He thinks this one is "no better and no worse" than other brand new buildings for defects. But when he talks about the project he says there are "things we got right and things we got wrong".

But what would be different now, had the job been traditional? "We probably would not have got on. I doubt that I would have made the building available to Steve for his meetings," he replies, half-joking but making a serious point.

Albert Park was a job with plenty of difficulties and too many contributors. Having a happy client at the end of the job is no mean feat. Hodgson, who was the project manager on this job, had to work hard to get here.

Hodgson, who is group leader, civils and structures, liked the idea of Egan because he hates confrontation, but he says it was difficult to get his head round the ideas at first. "The Rethinking Construction approach was not something that somebody could give you on sheets of paper, like at a seminar on new technical advice." He admits that it seemed like "a little bit of a fantasy world" to begin with. Would contractors really change? After all, contractors are the enemy. His staff were afraid they would be shafted.

Too many cooks
So there was Hodgson, on the Albert Park job, with his staff scared of partnering plus an unweildy project group: main contractor, subcontractors, the client, the Environment Agency interested in the lake, and park users.

He had one of the biggest challenges of his career, getting everybody involved to understand each other.

He came through, though. Look at the boat house. The architect designed it too small, and only found out when the project was well underway. The extra cost was £40,000. On a conventional project this would have doubtless led to claims, acrimony, delay. But here they were able to sit down with main contractor Land Engineering and the buildings subcontractor Dorin Construction and sort out where the money could be found.

Stokoe's Strategy
After a sandwich back in Stokoe's office, he and I sit down to talk about 'The Middlesbrough Driver'. This thing was the main reason that Middlesbrough won its award. Stokoe wants to develop and sell it to other authorities.

Stokoe, an ex-architect and long-time local government man, was brought into Middlesbrough Council in 1996 with a brief to turn the department into a business. One of the first things he did was to persuade the council to pay for his MBA. "Look, I was never trained as a business manager," he told them. He did the MBA, by distance learning and in his spare time. Since then he has persuaded Dave Hodgson to start one too.

Implementing the Middlesbrough Driver is Stokoe's defining achievement. A business tool for measuring and improving performance that was developed for Middlesbrough Council to use at a corporate level, Stokoe has applied it to his department to profound effect.

Take a group of disheartened local government employees, conditioned by the very nature of their jobs to stick to the rules. Axe a third of their friends, tell them they have to operate like a private-sector consultancy, on their public sector salaries. Then introduce partnering: twice as much work per project as you hand-hold contractors and clients who've never done it before.

How do you do get people on board with all that? The Middlesbrough Driver (see below).

Public goes private
He takes me upstairs to the design services office. It's like finding a Conran café in the middle of the Co-op. Gone are the grey cabinets and piles of paper. Instead a bright, open-plan floor with plants and an 'informal seating' area. It feels like a consultancy.

The staff asked for the refurbishment as part of the yearly review process, which is central to the Driver. If they had to be professional, they wanted to look professional. Hodgson had told me earlier that this refurbishment was his greatest achievement which at the time I thought strange. Why not choose Albert Park or winning the award? Now I understand.

It is an amazing transformation.

"The way they have taken to the Rethinking Construction regime is first class," says Grimston. "These are dyed-in-the-wool local government employees. They are absolutely the last people in the world you would expect to be able to change."