Alistair Houghton meets PAUL KENNEDY, chief executive of CEL Group

IN PAUL KENNEDY’S office, classical music acts as a soundtrack to a tale of business success with a big heart.

Kennedy leads Cheshire-based CEL Group, a business which offers services from training to public sector procurement and international money transfers.

He led a management buyout (MBO) in 2008 and has since seen CEL double in size.

Now he wants it to grow still further by working with public sector bodies looking to cope with the cuts – and he is on the hunt for more investment to help him.

Kennedy says he wants to help the public sector work more efficiently, whether by helping diverse organisations work together or by helping them buy goods more cheaply.

As we spoke in his Birchwood office, where classical music including Pachelbel’s Canon played in the background, Kennedy sang the praises of private sector support for public services.

“I describe CEL as a private organisation with a social purpose,” he said. “It’s in our DNA.

“This business is about delivering more for less. We’re perfectly placed to help deliver what I’m passionate about – doing everything we can behind the scenes to protect frontline services. There’s so much potential to make public service organisations more efficient. It’s not always about headcount reduction.”

CEL Group is split into three divisions – CEL Public Services, CEL Procurement, and CEL Transact.

CEL Public Services delivers services, such as work-based training, for public sector bodies.

It acts as the national body co-ordinating the work of 230 Home Improvement Agencies.

Kennedy said: “These organisations help elderly and vulnerable people stay in their own homes as long as possible, rather than going into social care. We help them share best practice.

“These are not-for-profit organisations. But, in the changing world of the voluntary and community sector, they will have to become more commercial and operate like businesses.”

CEL has also teamed up with charities Age UK and Community Service Volunteers on a project to help elderly and vulnerable people switch from analogue to digital television.

For Kennedy, Digital Outreach is a case study for David Cameron’s much-vaunted Big Society, as it shows how a private sector and a voluntary sector organisation can pool their skills to make a difference.

CEL Procurement provides procurement services for public sector bodies and quangos across the UK. It handles products and services worth more than £100m every year.

Its Partnership for Housing brand is a buying consortium for 90% of the UK’s housing associations, while Independent Healthcare Procurement carries out similar work for care homes and hospices.

CEL Transact provides payment services to help people transfer money across international borders.

Its Uni-Pay system, run with banking partner HSBC, provides a secure system for international students to pay fees through their local banking system in their local currency.

Kennedy, originally from Scotland Road, in Liverpool, moved to Runcorn as a child. He chose not to go to university and, after a year as a sports journalist, moved into the Civil Service.

He focused on “market testing” – testing the efficiency of public services by seeing how they compared to private sector offerings.

Ten years later, he was headhunted by the public sector procurement division of Hays. After seven years at Hays, he joined Sheffield-based training and welfare-to-work specialist A4E.

“For the first time in my career, I found myself working for an organisation that made a profit but also made a difference,” he said. “That sparked something in me.”

In 2006, he left to become managing director of IT firm Redstone Converged Solutions, leading a turnaround that took it back into the black. But, in 2008, he was approached by a headhunter – his former employer Hays – to join CEL.

“What interested me was that the owners were looking to exit the business,” he said. “I had worked really hard making lots of money for other people – and it was time to see if I could do the same for myself.”

He and partner Mohammed Ramzan completed their MBO in October that year – a great achievement at the height of the credit crunch.

“The papers went out to HSBC the day Lehman Brothers went pop,” said Kennedy.

“I was in New York that day. My business partner phoned me and said ‘you’ll never guess what’s happened’. I said ‘I know, because I’m right outside their building’.”

Since then, CEL’s turnover has more than doubled to £7.5m. The company moved from Glossop to Birchwood, while headcount has doubled to 90.

Kennedy has enjoyed the challenge of running his own firm – though he admitted it was tough at first.

“When I worked for a bigger organisation, I felt I had an umbrella,” he said. “Somebody put a certain amount of money into my bank account every month. Today that’s not the case.

“I did this MBO on a Friday. Driving to the office on Monday, I had this thought thundercloud over me – every single one of my employees is relying on me to take the right decisions to enable them to pay their mortgages. That’s a really sobering thought.”

Today, Kennedy works on the business’s growth strategy while his divisional MDs control the day-to-day running of the business.

“My managing directors look after today and I look after tomorrow,” he said.

Kennedy says the ongoing public sector cuts could lead to more opportunities for CEL as the Government looks to outsource services.

He said: “We are looking at areas such as preventing reoffending.

“There is a natural diversification for us into other policy areas.”

Kennedy is now in talks with potential investors about his ambitious growth plans for CEL, which include acquiring rival firms.

He said: “We are at the tipping point now where I’m going to consider seriously the involvement of venture capital or private equity.

“I want to get this organisation to turn over £60m or £70m in the next two or three years, both organically and through acquisition.”

Despite its recent successes, CEL remains a minnow compared to outsourcing giants such as Capita.

Kennedy believes smaller companies such as his can play a big role in the Big Society – if the Government will let them.

He mused: “The interesting thing for us is going to be whether comments made by the Government about the SME sector delivering public services proves to be rhetoric.

“There’s so much talent in the SME sector that’s missed by Government simply because we haven’t got the recognised name of a Serco or a Capita.”

Kennedy is now keen to share his experiences with other business owners by becoming a non-executive director on other boards.

Outside CEL, Kennedy works with charity Positive Futures, which supports young people in disadvantaged areas of north Liverpool.

Back home in Frodsham, he focuses on fitness and his family.

He said: “I’ve started going back to the gym – I’ve lost 2½ stones in the last six months.

“Most of my weekends are spent taking my son to different parts of Cheshire for football or rugby.

“My daughter and my wife have horses. We tend to split up in the day and come back in the evening.”

Kennedy is a big Liverpool FC fan – as demonstrated by the signed Steven Gerrard boot framed on his office wall – but he is not a season ticket holder.

“There’d be a very low return on investment on that one,” he smiled.