Collaborate Research Consultant, Dan Crowe writes for ‘Public Finance’ on an important juncture for commissioning.
Pooled budgets, co-production and personalisation are the keys to developing a more effective system of public sector commissioning. Such a new approach could transform outcomes and achieve substantial financial savings.
Commissioning is at a crossroads. Hit by a succession of outsourcing scandals, the use of big contracts and growth in new payment mechanisms have come under increased scrutiny from politicians and the media, as well as watchdogs such as the National Audit Office. This landscape is not only increasingly complex – in terms of new funding, financing, partnering and payment models, as well as the complexity of meeting multiple presenting needs of service users – but it is also in a state of flux.
A new joint report by Collaborate and the Institute for Government, Beyond Big Contracts: commissioning public services for better outcomes, has identified three broad trends arising from implementation of the government’s Open Public Services agenda that threaten to undermine the improved outcomes for users and communities that the policy is designed to achieve. These trends relate to the shift to outcome-based contracts, the transfer of risk and scope for innovation, and the changing nature of the relationships between commissioners, providers and service users. Whilst these trends undoubtedly present opportunities for these three groups of stakeholders they also generate significant challenges. For example:
- The shift to outcomes-based contracts poses problems in how to best understand and measure outcomes, how to translate these into contracts and how to ensure that providers are rewarded appropriately, particularly in meeting the needs of the most disadvantaged service users or clients with complex, multiple problems.
- Although the rationale for adoption of these new models is to transfer risk to providers in anticipation of creating the room and impetus for innovation, in reality providers concerned with their own financial survival are – unsurprisingly – unwilling to innovate by doing things differently.
- Relationships at all levels across the piece are fracturing and reforming in response to these new structural reforms, with potentially adverse consequences for all involved. Commissioners risk becoming increasingly removed from their local social sector organisations, raising questions as to the future health and efficacy of the channels of communication between the public sector and the public they exist to serve.
In our report we look at what needs to happen to make commissioning work better for service users and communities under a commissioning 2.0 platform. Key components include:
- Deeper collaborative commissioning arrangements between commissioners and providers, facilitated by the use of pooled public sector budgets, the sharing of social sector expertise through the creation of consortia, a focus on preventative measures to drive down demand and an approach that maximises social value as well as value for money.
- Co-production must sit at the heart of a locality’s commissioning, involving users and the community in the co-production of outcomes as well as services through a robust co-production methodology.
- Recognition that service value must be co-created with the user, as improved outcomes cannot simply be compelled by the state, with services being flexible, personalised and tailored to the specific needs of individuals.
By incorporating these essential elements, we not only have the opportunity to commission transformative, citizen-focused services that achieve a range of improved outcomes, but also to have an impact on achieving real savings in public expenditure over the long term. As one social sector advocacy organisation told us in the course of our research: ‘There is a systemic failure of public services to work with multiple-needs clients in a holistic way. Services can’t or won’t help, clients don’t want help or are hard to help. If we can get it right for them, we can get it right for all.’
This blog was originally posted on the Public Finance website.