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Maximising the impact of commissioning

Flexibility is the key to ensuring public service commissioning has a positive social impact, as Jenni Inglis explains

Localism and deficit reduction are key policies of the coalition government with major implications for all public sector bodies. In the health service, boundaries between public, private and third sector provision are shifting radically.

In short, the public sector is under pressure, this much is obvious. This degree of pressure requires radical rethink: it is no longer, if indeed it ever really was, sufficient to seek efficiency within existing services. Services must be reinvented to be as transformative as possible, as joined-up as possible, and as encouraging of individual and community self-help as possible.

Transformative means that they really make a difference to people and they don’t just move people around a system without helping them to improve or change their lives. Joined-up means that duplication is minimised, that people are treated as whole people, that public services are seen as part of a broader system acting both positively and negatively on society. And encouraging individual and community self-help means that citizens feel inspired and supported to do what they can do for themselves and for each other.

It is not possible to achieve these kinds of services by starting with existing services and looking at how they can make a bit more difference or how they can be delivered a bit more cheaply. That’s not to say accounting for and controlling cost is unimportant or that incremental change is not worth having. It simply acknowledges the current financial challenges and entrenched problems can’t be solved by a focus on cost alone, nor on improvement alone.

Instead of tinkering round the edges it is necessary to start with fresh questions about what the objectives of a service should be, the best general approach to meeting them, how and indeed whether services should be sourced from third parties, and how they should be performance managed.

Each of four these points, which could be seen as relating to four points on a commissioning cycle, require value judgements based on information about what is valuable. So how to arrive at those judgements and based on what information?

An existing framework for accounting for value (Social Return on Investment, SROI) has much to offer to this question. SROI recognises that people may experience changes as a result of services and that these changes are of value to the people that experience them. It further recognises that the changes may be positive and negative and of greater or lesser importance, and therefore than any articulation of value needs to take this into account. Perhaps most crucially it requires that those making judgements of what is valuable do not do that in isolation from the people for whom value is created or destroyed.

SROI is therefore a framework suited to developing analysis of priorities in complex situations, in a way that is informed by multiple stakeholders. It solves the aforementioned issue of professional judgement through a set of principles to guide that judgement and a worldwide community of practitioners who reflect on how those principles may be applied more and more consistently in different settings.

The principles are, in brief: involve stakeholders; understand change; value the things that matter; only include things that are material; do not overclaim (which may be otherwise described as ‘recognise your contribution as part of a system’); be transparent; and verify the result.

Following on from a guide to the use of these principles, the SROI Network has written a Guide to Commissioning for Maximum Value published by the Local Government Association. It applies and extends the principles above in the context of commissioning public services. It is for people involved in commissioning in all public bodies. It is intended to help commissioners allocate resources in ways that make as much positive difference as possible and to minimise negative impacts of services they are responsible for.

For any area of public expenditure, there are many theories on what constitutes value for money – what will create most value with minimum spend. Commissioners have a crucial role to play in improving those theories, by supporting the development of evidence about them. The question ‘what is the value of this service?’ is not answered by ‘the unit cost’, so systems that measure change and difference are needed.

As to how revolutionary commissioning teams find the practice outlined in the guide to be, this depends on where you’re starting from. In some places commissioning capacity itself will have been lost with budgetary pressure, in others there will already be fantastic commissioning capacity, which is joined-up with other public bodies and engages well with a range of stakeholders including service users. For the majority of commissioning teams, who find themselves somewhere between these two poles, some skills and process development are needed. The shift towards localism means less central prescription of what is valuable, but which systems will guide local public bodies judgements about value? A top-down, prescriptive, toolkit approach does not work in the era of localism.

The guide takes the seven principles listed earlier and illustrates how they may be applied at each stage of a commissioning cycle. It is built around five key messages:

  1. When initiating commissioning, be open to and seek new ideas and new problem definitions from a range of sources
  2. When carrying out needs analysis, improve your understanding of causes and effects by talking to users and focus not just on deficits but on assets and aspirations
  3. When appraising options, forecast value and base your choice of options on an assessment of value, not just costs
  4. When sourcing, use an assessment of how value may be created and destroyed, to inform decisions about how best to secure a solution, specify it, judge bids and manage performance
  5. When implementing, delivering and reviewing an intervention, fill in any gaps in your understanding of the value delivered by the solution by carrying out further stakeholder involvement.

It’s important to note that use of the guide will enable you to meet duties under the new Public Services (Social Value) Act since it offers some practice on the two key requirements that must be met prior to procurement (of services) commencing. These are the consideration of ‘how what is proposed to be procured might improve the economic, social and environmental wellbeing of the relevant area’ and ‘how, in conducting the process of procurement, an authority might act with a view to securing that improvement’.

If you follow the guide you will have considered and have a strong understanding of how the service you have eventually decided to procure can create value, i.e. you’ve made appropriate wider value creation a part of the scope. You will also have considered what you can do during the procurement (process used, specification, award criteria, clauses, contract management) to secure and manage that value. The approach to implementing the act that the guide supports goes beyond asking suppliers what they will do within a scope already set in isolation from potential supplier and service user input – a procurement-led approach – to a full commissioning approach.

Promoting the use of this guide as good practice in meeting the duties of public bodies under the act is therefore a good chance for everyone to make the legislation meaningful and not simply a tick box exercise.

Another point is that best value authorities will also find it helps meet the new best value statutory guidance published last year. But most importantly, it will help you to achieve more social value through your commissioning by helping you collect better information and make better judgements. It will support you to achieve transformative, joined-up services that allow communities and individuals to unlock their potential.

Jenni Inglis
Jenni Inglis is a director of the SROI Network and runs VIE, a social value consultancy

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