Profile: Adrian Ringrose

ADRIAN Ringrose is sitting on the fourth floor of an office block that is best described as functional.

This is a building of tough-wearing carpet tiles, shared desks, plastic water cups, strip lighting and views over a railway line.

If the tower block, the London headquarters of outsourcing group Interserve Plc’s facilities management arm, looks a little understated, that’s exactly the impression its chief executive is aiming for.

“We run our business pretty parsimoniously,” said Ringrose. “We’re in a cut-throat market in most of our business streams.

“We get very excited if margins are low single digits. Every single bit of the cost base we need to manage carefully.

“We don’t need to look flash – our culture is one of understated expertise. We put our money into the bits that add value.”

Of course, when you’re spending millions of pounds of public sector cash and promising big savings in return, it helps to look frugal.

Ringrose, 45, heads one of a number of firms which make their living doing what the public and regulated sectors do or did, but according to him, better.

Since the public sector started handing out contracts to run services in the 1980s, outsourcers have become embedded in many walks of life.

Interserve, with turnover of £2.3bn and a £5.6bn order pipeline, is tapping into a rich vein of opportunity as cash-strapped councils and businesses contract out services and building projects.

In Yorkshire, Interserve has a 10-year tie-up with Leeds Council to manage, build and refurbish schools under the £290m Building Schools for the Future programme. Fourteeen schools have been built under the contract. Maintenance, security, caretaking and cleaning will be done by Interserve at these schools for the next 25 years.

Interserve recently won a £150m contract to design, build, finance and maintain two new divisional headquarters for West Yorkshire Police in Leeds and Normanton, plus custody suites and a training facility. Again, Interserve will maintain the facilities for 25 years once they are built, providing everything from furniture to pest control.

Interserve even has Government contracts to get the long-term unemployed in South and West Yorkshire back into work. It bought training and development firm Business Employment Services Training (Best) Ltd for up to £18.25m in May. Welfare-to-work is a lucrative sector – Best earned operating profits of £3m on £17m turnover.

Ringrose, brought up in Newcastle, started his career as a market researcher with London Electricity.

He rose through the business, including managing subsidiaries in power distribution and fleet management. In 1997 he joined Building & Property Group as head of business development.

He joined Interserve – or Tilbury Douglas as it was known – when it bought BPG in December 2000. He soon rose to head its facilities management arm, and became deputy chief executive in January 2003, before assuming the role of chief executive the following July.

Ringrose estimates the UK public sector, a relatively mature market for outsourcers, is only about 15 to 20 per cent penetrated and the full impact of the Government’s austerity drive has yet to feed through.

But while some public sector bodies remain unwilling to contract out their services, Ringrose says the squeeze on public funds increasingly makes it a necessity.

He says a new outsourcing contract should deliver 20 to 30 per cent savings.

“If the austerity environment and cost pressures that local authorities are under is sustained, they might make it through the first year, but keeping that rate of improvement up year-on-year is going to stretch people.”

For Ringrose, who chairs the Public Services Strategy Board at business lobby group the Confederation of British Industry, there is no contest when it comes to choosing between the public and private sector to deliver basic services.

He argues the public are happy for private firms to deliver public services “as long as it’s done well and at a certain cost”.

“I would back the private sector against public sector competitors. We understand about winning and pricing for resource.

“They (the public sector) are experts at managing services, but perhaps to a slightly different agenda – not necessarily having to do it for a certain economic value.”

For private firms, he said the risks are far greater. “The flip side of the profit motive is the fear of failure motive.”

We are speaking days before rival G4S makes the headlines for its failure on the Olympics security contract, one of the most high-profile examples of outsourcing gone wrong in recent years.

The public sector –the army and police – were called in to mop up after G4S, filling the gaps in its failed recruitment drive. “The market deals with people who do not perform,” he said. “I’m a great believer in the market because it instils that discipline and quality that’s needed.

“Within the public sector, an exit through failure is not an option. You don’t lose your job, somebody else comes along.”

Ringrose admits there are limits to outsourcing. “Imagine an army where soldiers are provided by contractors or police force or justice system where the dispensation of justice (is privatised). It’s hard to imagine a judge being provided by anyone other than the state.”

But even these boundaries have been blurred.

Interserve is part of a consortium, headed by Sodexo, which runs prisons in the UK for HM Prison Service – HMP Forest Bank in Salford, HMP Peterborough, HMP Bronzefield in London and HMP Addiewell in Scotland.

Interserve’s new justice team – headed by Yvonne Thomas, former operations director of the National Offender Management Service – has designs on new contracts to run HMP Durham, HMP Onley in Rugby and HMP Wolds in East Yorkshire.

Many of its projects are delivered through the Private Finance Initiative (PFI) – the controversial public/private financing system which grants long-term contracts to companies in return for stumping up development costs up front.

To critics, they are a short-sighted way of paying for unaffordable projects, and often leave the taxpayer saddled with onerous debts for decades.

But to Ringrose, PFI contracts are the “bridge between aspiration and reality”.

“The public sector wants to deliver a new school but does not have the money.

“There have been examples where the private sector has done rather well.

“Equally it killed Jarvis (rail maintenance firm).”

PFI is at the heart of its West Yorkshire Police headquarters deal, with Aviva providing the bulk of the funding.

“With them, PFI was the only route.

“We’ve done incredibly well to get a deal over the line and get it financed with long-term debt.”

Ninety per cent of the group’s 50,000 staff are based at its clients’ premises and never enter Interserve’s front door.

With so many disparate locations, Ringrose admits one of the biggest leadership challenges is getting staff to feel part of both Interserve and its clients.

“We need to be sharing knowledge, setting standards and equipping people to know what’s expected of them, as well as continuing the pride in being part of the client’s organisation.

“We’re not only there to help that customer deliver their business, but also to make a difference for them.

“I happen to think what this business does is important.

“There’s so much to chased and opportunity to be pursued. It’s inspiring to be part of that.”

Adrian Ringrose Factfile

Title: Chief executive, Interserve Plc.

Born: April 9, 1967

Education: Newcastle Royal Grammar School; degree in Political Theory and Institutions at Liverpool University.

First job: Graduate scheme with London Electricity.

Last book read: The Girl with the Dragon Tattoo, Stieg Larsson

Favourite film: Either Sophie’s Choice, Lawrence of Arabia or Toy Story 2.

Favourite song: Tracks Of My Tears by Smokey Robinson & The Miracles.

Holiday destination: Brazil.

Car driven: Audi Q7 and Porsche 911.

Most proud of: My two daughters and son.