PROCUREMENT AND FINANCE


“Big is rarely best when it comes to public services – especially human services.”


But then, as Bent Flyvbjerg and others have shown, that is always the case. It’s just that in an open and deliberative process these confl icts are recognised and engaged with. Doing this can only make decisions more legitimate; this is all the more pertinent during a time of cuts.


2. Commission for full social, environmental and economic value at the local level


Local authority commissioning shapes how vast sums of money are spent in local areas across the country. It infl uences the quality and availability of public services and their impact on the local economy.


However, traditional approaches to commissioning and procurement fail to adequately take into consideration the value that can be created by different approaches to delivery and their wider social, economic and environmental costs and benefi ts.


3. Remember that small is beautiful


Over the past 30 years, procurement rules governing how local services are purchased have come to favour large scale contracts and big organisations and businesses. Looking at the ‘One Barnet’ plan and other similar propositions, it looks like this will continue to be the case.


But big is rarely best when it comes to public services – especially human services. Big services are usually infl exible, impersonal and unresponsive to people’s needs, and they fail to get the full social, environmental and economic value from public money. In fact, as a July 2013 report from The Centre for Welfare Reform argues, at their worst, large scale contracts can lead to a ‘hollowing out’ of local communities with regards to skills, employment opportunities and smaller community organisations.


In response we need to move towards smaller scale services,


with less hierarchy, fewer


onerous targets and more emphasis placed on building people’s capabilities, relationships and mutual support networks. Our work with Camden Council shows how this can be done through commissioning in a mental health context.


4. Collaboration over competition


Too often value is confl ated with price alone. The Public Services (social value) Act points towards a much more helpful understanding of value, placing a duty on public bodies to consider social, economic and environmental value before services are procured.


Questions remain about quite how different local authorities will interpret the Public Services Act. However, ambitious councils can use it to promote living wages and good jobs, support sustainable local economic develop and protect the environment.


For a great example of this in practice, read about the Evergreen Cooperative initiative.


At the heart of the move towards outsourcing in local government, and other public agencies, is the belief that competition yields better services at a lower price. However, there are a number of potential problems with commissioning services competitively, especially during a time of austerity. One is that you create a ‘race to the bottom’ affecting service quality and producing false effi ciencies in the long run. Another is that competition sets providers against one another and stops local organisations working together and sharing resources. This is wasteful.


In addition, competitive commissioning can favour larger organisations (who are better at writing bids) over smaller providers, who might be more connected to the local area. An alternative is to develop collaborative commissioning models. The Lambeth


These fi ve principles have been drawn out of our experience of working with local authorities on commissioning human services – namely mental health and youth services – during a time of cuts. They are by no means exhaustive and their relevance to all public services will vary.


However, taken together, they could help enormously in ensuring that public services keep people, rather than the fi nancial bottom line, at their heart.


References for this article are available at www. publicsectorexecutive.com


Joe Penny TELL US WHAT YOU THINK opinion@publicsectorexecutive.com public sector executive Sep/Oct 13 | 57


Collaborative is a good example. The Collaborative is made up of commissioners, providers of health and social care services, and service users and carers. Together they take an asset-based and co-produced approach to commissioning. One unique element of the collaborative is the alliance-contracting model they use. This brings together a set of providers who sign up to a values based agreement and framework to collaborate with one another, share ideas and coproduce their services.


5. Set minimum cost to quality ratios


In our research into the new austerity we heard from providers about mental health and


homeless services that were being


commissioned on the basis of a 90% cost to 10% quality ratio. This means that the cheapest bidder, regardless of how good they are or how well they treat and pay their staff, will always win the contract. This is as clear an example of a ‘race to the bottom’ as you will hear.


To guard against this, minimum cost to quality ratios should be considered, ensuring that quality always takes precedent. We are currently working with two local authorities on commissioning their youth services. Despite both receiving signifi cant reductions to their budgets, they are assessing providers’ bids on the basis of 80% quality to 20% cost.


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