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It’s time we did something about commissioning

Reform argues that the current system does not encourage innovation or quality. Whether provision is public or private it is typically a local monopoly with limited or no incentives to improve performance. Too often national and local commissioners prioritise price over effectiveness.

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Reforming public markets

The biggest challenge to the new Government which comes into power on 8 May this year will be how to ensure a good quality of public services within the demands of getting the budget deficit down.

Good commissioning is key to this but seems to receive very little attention.

Commissioning public services in 2015 is a huge challenge. Commissioners have to try to get providers to deliver more services of the same quality for less money. Commissioning teams themselves have also been drastically cut back over the last five years, with one or two people commonly doing a job that was previously done by a team of four or five.

I came across a radical idea for transforming the way in which public services are commissioned in a report from the Reform think tank before Christmas (published 18 November 2014). The report is called “Markets for good: the Next Generation of public service reform”.

Reform claims to be non-party political, but is mainly staffed by people with strong links to  the Conservative party, so it won’t surprise you that their proposed solution for overhauling commissioning is a market-based approach. Nevertheless, the report’s authors (Andrew Haldenby, Richard Harries and Jonty Olliff-Cooper) clearly know what they’re talking about and I found their description of the difficulties and challenges of current commissioning to be the best I’ve read. So much so, that I decided to write a series of posts over the next few weeks examining in more detail the key themes they highlight and looking at how their view of public sector commissioning squares with my knowledge of how the process works in the criminal justice, drug and alcohol and employability sectors.


Analysing the problem

One of the attractions of the report is that it is engagingly written and backed up with real understanding. The authors criticise the current vocational training system saying that it’s more fit for “nail technicians than nano technicians”. That might sound a little flip, but there is a real point:

“This is the reason why in 2010-11, the taxpayer funded 94,000 people to qualify in hair and beauty, despite the fact that there were only 18,000 vacancies in that industry. Simultaneously the skills system produced only 40,000 people qualified to work as plumbers, electricians and other tradespeople, despite there being almost 72,000 recorded vacancies in that industry.”

This situation is directly linked to a commissioning system which finds it easier to specify outputs rather than outcomes and of course it’s much easier to train up 1000 hair and beauty practitioners a year than a thousand carpenters.

It is also linked to a set of commissioning structures which focus narrowly on one key area of operation – getting skills, tackling an alcohol problem, finding accommodation or employment – despite our knowledge that the people in most need (and who cause most damage to themselves, their families and their communities and incur the most public expense) typically face many of these problems at the same time.

The Reform report not only calls for joined up commissioning but suggests a way forward.

It argues that the current system does not encourage innovation or quality. Whether provision is public or private it is typically a local monopoly with limited or no incentives to improve performance. Too often national and local commissioners prioritise price over effectiveness.

You won’t be surprised to hear that the Reform paper also argues for a proper shift to outcomes commissioning within a payment by results framework.

The figure below summarises the Reform analysis of the problem:

Reform vicious cycle


Commissioning Wednesday

So, every Wednesday for the next few weeks, I will be examining one of the difficulties about modern commissioning highlighted in the Reform report, giving real-life examples from my own experience and arguing the case for real change in commissioning over the term of the next government.

I hope you find it of interest and contribute your own examples of how commissioning works, or doesn’t work, in your area.


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Related posts

Payment by Results
Can the new Work Programme succeed?

Reform report says new Work and Health Programme should level the playing field for possible providers but still recommends heavy PbR approach.

Payment by Results
Can payment by results improve outcomes?

The idea is that by commissioning outcomes rather than outputs, commissioners allow provider to work in any way they see fit, safe in the knowledge that if the outcomes are not achieved, they do not have to make payment. But do PbR schemes achieve better outcomes?

Can we change public service markets for good?

We have to join up commissioning much better for this last group of people. So, should a homeless, unemployed drug dependent offender have one provider to deal with all their problems in the round, or separate providers (all specialists) responsible for each End Result? Reform suggests two possible solutions:

Stop commissioning, start licensing public services

The idea is to let public services work like any other market with consumer choice meaning that the best services get to be market leaders and the market changes over time. To achieve this, Reform suggest doing away with the cumbersome procurement approach and introduce a licensing approach with these key features:

An inflexible commissioning system

Another consequence of these lengthy monolithic contracts is that it is very difficult for governments to change policy direction. Reform makes the point that to implement change a new government will often have to compensate existing providers and institute new, lengthy and expensive procurement processes. Although old providers may get some compensation, all potential

7 Responses

  1. Great to see this post and report highlighting the important issue of commissioning public services, and I look forward to reading more. There are many echoes here from research we published last year on the commissioning of offender services, not least the sometimes competing drivers of cost reduction and diversifying markets being balanced by commissioning teams facing their own reduced resources. Similarly we found that while many voluntary sector organisations deliver holistic tailored services to people with complex needs, the agencies that commission their services often operate in silos, as you have highlighted.

    There were mixed views on outcomes-based commissioning though – we found people felt it was good in theory but extremely difficult to get right in practice. I’d be interested to see more of how Reform’s report proposes this could be achieved.

    See our blog for more:

  2. I must agree that it’s good to highlight commissioning. For me the best services deliver the right intervention to the right people at right place for the right reason and with efficiency.

    Bean-counting anything tends to inhibit this but we cannot evidence quality without counting something! It’s a simple paradox but if commissioners unpicked services and sought effective evaluation rather than lazily rely on headlines, then our services would produce better results – whether they are countable or not.

  3. What a great article to read in this present climate of uncertainty and ever-changing commissioning ‘strategies’. I use the term strategy loosely, as working in the NHS for 30 years, I have noted that the commissioning has become less joined up and more budget-bound and blinkered than ever.

    Constant re-commissioning and re-tendering of services every three years or so, which care for and treat some of the most marginalised groups in society does not encourage us to innovate and improve services, rather we are forced to repeatedly change IT systems and policies and work in uncertain futures of our own, and this does not help our clients. It is hard to make long-term recovery plans with people when you have no idea whether your service is even going to be in existence or not in the next few months!

    I will be reading these blogs with interest and wish I had the influence to take up some of the points for change!

  4. Indeed. Better use could be made of longer contracts with review periods and break clauses rather than contracts ending and an entirely new tender process beginning. And Reform’s suggested model of licensing rather than contracts certainly provides some food for thought on other alternatives.

  5. That would be a far better functioning way of doing things Isabel. Stability is a key to many health issues as Russell says and longer contracts with appropriate and informed commissioning management would offer clients and service providers a more robust platform to make changes from. What a shame this is not how things are going currently.

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