Commissioning as a strategic tool for public organisations

We featured the collection of Dave Orr’s pieces on Southwest One the other day, but we also had an email from him last week around the commissioning and procurement issue we’ve been featuring  regularly.  When I say “email”, I mean “thought provoking essay”, so on that basis I asked him if we could publish it as a guest post. Go ahead, he said... all views expressed are of course his own.

The impacts of the 2008 banking crisis continue to be felt throughout the economy; the national debt has continued to rise and yet again Local Government bears the brunt of national budget cuts. Councillors have difficult decisions to make and now, more than ever, retaining the expertise, motivation and good will of the workforce must be one of the priorities of any good council.

 “Commissioning” is a term that lacks definition, so can become a byword for externalising services or outsourcing.  These all involve legal contracts and the recent experiences in Somerset with IBM and Southwest One, have shown that these are fraught with complexity and risk.

 It is worth noting that 50% of outsourcing contracts fail outright, with 70% costing more than expected. Yet most commissioning models make 'contracting' a core part of the process, even though most also profess to be neutral as to which service delivery model is preferred.

The routine use of the word 'contracting' (and sometimes 'procurement') is, we think, unhelpful since it explicitly assumes that a contract will be entered into with another organisation. A truly neutral commissioning model should embrace all forms of service sourcing, including in-house (do it yourself) and in-sourcing (do-it-yourself with outside help).

 A key part of any commissioning-based policy is to understand fully how the existing service is delivered; to baseline the existing service so that you know what you get for the budget you spend and finally, to see what improvements can be made - either yourselves or by “in-sourcing” external help and resource, before considering other forms of sourcing.

Councils need to support service improvement that is based upon partnership and respect between them and their own workforces. After all, we share common aims and values. And it is important that Councils have a neutral stance to sourcing and avoid marginalising their own management and workforces, by labelling existing in-house services as the “Do Nothing”, “Status Quo” or “No change” options.

Sourcing is a component of commissioning. And in turn, since a decision on sourcing could include an in-house or in-sourcing option, then ‘procurement’ and ‘contracting’ are components of sourcing. Commissioning in this neutral model is a much more broadly based activity than either sourcing or procurement and is closer in scope to strategic service planning.

Most commissioning models expect various policy-making activities to be undertaken, including needs analysis, consultation and the determination of outcomes. SOLACE have highlighted that commissioning has become for some progressive authorities a universal strategic planning and business management tool, combining policy-making and the design of new service models and their implementation.

Service Improvement Plans are a key tool to ensuring that the in-house services are part of the continuous improvement activities of any Council. They allow for private sector involvement through an in-sourcing model, eliminating much of the complexity and risk in the complex contract-based outsourcing model.

The message to elected representatives is therefore something like this.

In-house Services are under the Council's direct control and have a number of key advantages:

  •               Maintains direct democratic control by you
  •               Services are directly accountable to you and thereby to all the people you represent
  •               Ability to be flexible without costly & time consuming contract re-negotiations
  •             Local Authority has greater control of risks (strategic and operational) – no concerns about contract exit plans and service continuity
  •               Genuine scrutiny without commercial confidentiality and secrecy constantly intruding
  •               Alignment with your strategic plans (based on your election manifesto)

 The conclusion is this. Councils should adopt a model of Commissioning that is sourcing-neutral, and properly values public services and the dedicated workforce that deliver them.

Dave Orr

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Voices (3)

  1. Dave Orr:

    Southwest One contract dispute cost council £5.9m

  2. Nigel Behan:

    Just to clarify that I am a worplace representative for UNITE at Somerset County Council.

  3. Dave Orr:

    With acknowledgement and thanks to Nigel Behan of Somerset County Council, who shared his own paper on “commissioning” (with reference to the SOLACE paper “When the salami’s gone”) – the thoughts & ideas that led to this blog.

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