How could commissioning be transformed for the better?

What are the biggest challenges?

Charities have long played an important role in delivering high quality public services. With good commissioning, they could do more. However, many voluntary organisations have been finding it harder to do business with central and local government recently. This is not simply a symptom of spending cuts. It also reflects the increased pressure on public authorities, new commissioning arrangements taking effect, and entrenched risk aversion among some procurement teams. The result is that charities and social enterprises are experiencing significant barriers in commissioning, at a time when their ideas and skills need to be embraced.

Limited pre-procurement dialogue

Across the country, charities say that it is often hard to engage with commissioners and procurement professionals at the pre-procurement stage. Sometimes this is because of a widespread misunderstanding that EU rules prohibit such contact. Good commissioning involves early engagement with communities and the market to assess local needs, consider service design, and develop and understand the supplier base. With their close connection to the communities they serve, charities are often well placed to advocate on behalf of service users and advise on how to improve services. For example, in Gloucester a series of evening workshops organised by Gloucestershire Association for Voluntary and Community Action (GAVCA) and Gloucestershire Association of Parish and Town Councils (GAPTC) helped councillors became more aware of what local charities had to offer, and the potential to work in partnership to deliver local services. They also had the chance to explore different ways of funding the VCS including giving grants and commissioning contracts.

Contract decisions based on cheapest price, rather than value for money
Commissioners need to assess price, quality and social value when they let a contract but too often the emphasis is just on price. One NCVO member reports how four years ago a public health body let a smoking cessation contract where the contract specification was 80 percent quality and 20 percent price. This year the contract was re-let at 60 percent price, 40 percent quality. Procurement such as this can represent a complete diseconomy. For example, by creating employment opportunities for disadvantaged groups, building social cohesion through civic engagement, and attracting additional resources which complement public spending such as

volunteering opportunities and grant funds, many charities and social enterprises create added value to the services they deliver. York City Council provides an example of where this added social value has been recognised and embraced. Following engagement with the voluntary sector the council specified the consideration of air miles, food waste and employment practices in its Caf West contract. NCVO member United Response successfully tendered to provide the cafe service and is now providing job training for people with learning disabilities in the caf.

Contract sizes are increasing

In recent years we have seen an increase in larger scale contracts, driven in part by the Governments enthusiasm for the prime contract model of service delivery. There are potential advantages to this model, such as achieving greater scale and coordination of services - either thematically or geographically - and managing risk exposure. However, many charities are unable to access the capital needed for these larger scale contracts, resulting in a diminution of local or specialist expertise. A 2013 VCSE survey by Locality found that 42% of respondents believe contracts have become larger in the last five years and a further 52% expect them to become larger still over the next five years. 80% said this would provide them with less opportunities and a lower range and quality of services in their area.

Excessive requirements at PQQ and ITT stages.

Short procurement timescales can act as a significant barrier to charities wanting to compete for contracts. Producing high quality responses to what are sometimes complex and onerous PQQs and ITTs can take a considerable amount of time and resources, and a particular challenge is forming the partnerships or consortia needed to achieve the capacity and scale required to deliver some large contracts.

Whats the potential for the future?

Addressing these barriers will allow charities to play an even greater role in service delivery, resulting in public services that are more effective, efficient and responsive to local needs. While part of the solution lays in modifying procurement procedures, a true transformation of commissioning demands a refocus on the education and training of procurement and commissioning professionals. This should seek to bring about a cultural change amongst procurement professionals - whereby engaging with communities and the market throughout the commissioning process becomes the norm and be accompanied by a drive to develop a better understanding of the capabilities of the voluntary sector; value for money, and social value; as well as tendering requirements that reflect the complexity and scale of the contract being let. Importantly, any training package should also focus on encouraging commissioning and procurement professionals to work together more effectively. Too often, forward-thinking

commissioners offering scope for innovation or VCSE participation have their business case blocked by risk-averse procurement teams with rigid specifications. To address this disconnect and the other training requirements mentioned above - NCVO urges any future government to commit to extending the Commissioning Academy or other high quality training offers to all public sector commissioners along with their procurement teams within three years.

For members
Our election work will be stronger if we have real examples from our members if you have experience of the challenges associated with this issue, we would love to hear from you. Send us examples of your experiences to 2015project@ncvo-vol.org.uk