Big interview: Peter Hawes reveals Norse’s remarkable growth success story

Peter Hawes, managing director of Norse Commercial Services. Picture: DENISE BRADLEY

Peter Hawes, managing director of Norse Commercial Services. Picture: DENISE BRADLEY - Credit: Copyright: Archant 2015

Outside of Peter Hawes' office window stands rows and rows of buses and street sweepers emblazoned with the logo familiar to anyone who spends a single day in Norwich.

And behind the desk is the managing director of Norse Commercial Services, who has gone from a three-man team to heading 6,400 staff across the county.

In 1988, Mr Hawes helped set up a new 'department' for Norfolk County Council, which would contract out the council's maintenance and cleaning services following new rules from Margaret Thatcher's government - but keep the council as the overall shareholder and plough profit back into it.

A unique model at the time, it is perhaps more extraordinary that today this trial venture from Norfolk has been exported across the country including Wales, Devon, London and the north - with almost no competition from something similar.

And born of a cost-cutting era, the company, which incorporated under Labour in 2002, is yet again in times of public sector change with the wind blowing largely in its favour.

The pressures on councils to cut costs has seen demand for Norse's facility management services spike in recent years, said Mr Hawes.

'Because of the downturn in the public sector, it's really taken off in the last five to six years. The financial pressures on councils are huge,' he said. 'There are now a line of authorities who are talking to us.'

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And it shows, with Norse Commercial Services in secure contracts with 12 local authorities in Norfolk, 18 across the rest of the country, and 74 private companies nationally.

The 'business', which now sells services in maintenance, waste management, cleaning and catering, has been able to straddle the space between privatisation and the public sector, said Mr Hawes.

It was a 'risky' model to pull off, and one which would be unlikely to be given the go-ahead today.

'No one else is doing this, not even close - that combination of the public sector and the commercial sector,' said Mr Hawes. 'If I suggested this to the county council now, I think they'd run a mile. There just isn't the finance and you wouldn't have the history to win your first contract as quickly as you'd need it.

'There's an element of luck in all this. We were in the right place at the right time.'

Back in 1988 Norse launched with a modest £100,000 loan from its shareholders Norfolk County Council, having to hold its breath before landing its first £60,000 cleaning contract in Wymondham.

Now the private sector is its main competitor - but Norse has the political advantage of seeming less corporate, said Mr Hawes.

'Not all councils will want to take us,' he continued. 'Some will want to do it themselves, go along a different contracting route, have something more informal and flexible. It won't be for everyone.

'There does seem to be a tendency for authorities to be more comfortable going through a company than dealing with each other. Norse is like a neutral vehicle. It's not one council dominating the other.'

But the difficulty of getting hold of investment money is being felt by Norse too, with the company needing an injection of capital to boost its most recent ventures.

'Of late, the big challenge is getting capital into the business. Really, we have to be as self-sufficient as we can be,' said Mr Hawes. 'What's happened is the capital needs of Norse have changed. We have Norse Care and more energy and housing, all of which need capital.'

And with the banks more cautious and the public finances of their customers facing uncertainty, Norse is now waiting for some of its newest ventures to lift off.

Norse's energy branch made a loss last year and waste management is waiting to break into profit. Mr Hawes said they will 'come good'.

At the same time, a lack of available capital makes it even more likely now that no other council will produce a viable competitor to Norse than when it first launched into existence.

So the public sector-led initiative is looking to the next market, with the north east and Scotland up for grabs.

'I don't think there is a limit on expansion,' said Mr Hawes.

Do you have a business story? Contact business editor Ben Woods on 01603 772426 or email ben.woods@archant.co.uk

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