Rough Draft Version 4
National Procurement Strategy for Social Care
Calling for an integrated approach to procurement
27 February
Please review and send comments/amendments to:
Michelle Murray, Adviser, Finding Common Purpose
Winterbourne View Joint Improvement Programme
Local Government Association, Smith Square, London, SW1P 3HZ
[email protected] , 0207 664 3320
Please can I have comments by the 21st of March, 2015
Table of Contents
Acknowledgements
Foreword
Introduction
Why a Social Care Strategy for local government
Chapter 1 : Leadership
Chapter 2 : Outcome Focussed Procurement
Chapter 3 : Partnering and Collaboration
Chapter 4 : A Person-Centred approach to purchaser-provider management
Chapter 5 : Procurement as Enabler
Chapter 6 : Developing of Markets
Making it Happen- How LGA and NAG will support delivery
Appendix 1 : Model outcome based standing order for adult social care
Appendix 2 : Model outcome based standing order for children’s social care
Appendix 3 : Draft Provider Protocol
Appendix 4 : Framework for Action Learning Sets for use in the social care sector
Appendix 5 : Myth Busting
1
Foreword
Recommendation
Someone from commissioning/procurement,
someone from providers,
someone from people who use services.
An elected member
i
2
Introduction
Finding Common Purpose was a project consisting of representatives from ADASS,
the Care Provider Alliance, the Housing and Support Alliance, the National Valuing
Families Forum, Skills for Care, people who use services, CCG commissioners and
advocacy. It supported the development of the category strategy for social care
which aligned the imperatives of the Care Act 2014, and the Children and Families
Act 2014 with the themes within the National Procurement Strategy.
The National Procurement Strategy was the result of the Comprehensive Spending
Review 2010 set significant austerity challenges for Local Government equivalent to
a twenty per cent budget reduction between 2010/11 and 2014/15. As part of their
response, the Local Government Association (LGA) and the National Advisory Group
for Local Government Procurement (NAG) commissioned a report entitled ‘Local
Government Procurement Strategy 2012’, which has now resulted in the production
of a National Procurement Strategy for Local Government (NPS) that was launched
in July 2014. This has now been followed by Category Strategies for Construction,
Energy, ICT and Social Care.
In other areas of local authority procurement (ie Construction, Energy, and ICT), the
focus is on commercial processes and monitoring for efficient contract management
and control; as well as on bulk buying, social value considerations, joining with other
buyers to get better deals and the corporatisation of procedures.
The focus is
generally on making savings, with corporate procurement focussed on how
procurement can support the social and economic wellbeing of the local authority.
Good procurement for people with social and health needs have additional
imperatives as priorities. Given the risks inherent in not adequately and proactively
meeting people’s needs (ie ad hoc provision of care, higher incidence of
safeguarding incidents, hospitalisation and expensive reactive responses to
breakdown in care); procurement officials must focus how they procure services and
work in partnership with individuals and providers to design them. If commissioners
are to be able to appropriately fulfil their duty of care to their residents, they need
3
procurement officials to have the same priorities as they do. This recognises
procurement’s role in ‘focussing the beam’ and supporting the accurate
implementation of overarching commissioning objectives.
Commissioners’ priorities are in part dictated by legislation: Duties within the Care
Act 2014 include providing or arranging services that maximise independence,
prevention, and wellbeing. Authorities must also promote, without gold-plating,
diversity and quality in provision of care and support services. Arrangements must
be set up between relevant partners, including housing and local health services.
These duties and how they translate into procurement functions are explored in this
Strategy.
Duties within the Children and Families Act 2014 also require that local authorities
place children, young people and families at the centre of decision making, enabling
them to participate in a fully informed way, and with a focus on achieving the best
possible outcomes for children and young people. Local authorities must carry out
their duties under this act in a way that promotes integration between education and
training provision with health care and social care provision. The themes of personcentred provision, integration, and promotion of a local, varied, and good quality
providers run throughout this Strategy.
There can be a tension between the commercialisation of social care delivery,
whereby procurement processes award business opportunities to successful
independent care providers; and the social care policy with its drive towards
personalisation, greater involvement and control for individuals, and partnership
working with service providers. The temptation to view procurement as a business
decision, rather than as a care-centred decision, must be resisted if the results are to
be fit for purpose.
This Strategy aims to highlight best practice in social care procurement, set out key
recommendations and outcomes, and provide practical tools to promote synergy
between social care commissioning, providers, personalisation and procurement.

In social care, procurement must be involved during all of the commissioning
cycle, so that options about how money can be spent on health and care are
4
understood, and market analysis is available at the outset of the procurement
process.

In social care procurement, it must be recognised that the procurement
imperatives must align with that of the commissioners’, and that procurement
officers are able to offer a range of solutions which are person centred and
deliver timely and adequate support to individuals.

In social care procurement, it is critical that long term and trusting
relationships are built with current and potential care providers. This is
because innovation in care markets is difficult to achieve through contracting
alone. This is also because trying to use contracts as the main or only
provider management mechanism is likely to produce very high transaction
costs.ii

In social care procurement, it is also not the ‘label’ that the official carries,
whether ‘commissioner’, ‘strategic commissioner’, or ‘procurement manager’
which matters as in practical terms, the boundaries between these related
activities can be porous - it is the function that they carry out. This strategy
can be useful for anyone responsible for the buying of social care and support
within a local authority.

In social care procurement, the quality of the communication between
stakeholders is paramount to getting the right outcomes for people who use
services.

In social care, because the majority of care is delivered by independent
providers, procurement approaches must demonstrate the importance of
creating and maintaining a diverse and appropriate market so that
commissioners and individuals who have a personal budget or personal
health budget have a choice of quality services to buy.

In social care, because of the close connection between health and social
needs, procurement strategies needs to be aligned with local Clinical
Commissioning Groups (CCGs) and other NHS services so that the service
provided to people is seamless, so that providers in a local area have an
accurate picture of how many people need what kind of service, and so that
funding flows are agreed at the outset and are not a factor that delays people
receiving the care and support that they need.
5

In social care, because of the necessity of looking at accommodation
alongside of care delivery, procurement strategies must have regard to, and
help join up, the housing needs and solutions for people with assessed needs
in their area.
Chapter One : Leadership
In the field of social care, local authorities need to speak clearly with a single
cohesive voice to ensure that central government policy takes into account the
needs and differences of local government. Leadership is also needed to signal
commitment from the top to recognise the strategic importance of procurement
throughout the commissioning cycle.
In the Bolder, Braver and Better: Why we need local deals to save public
services report by the Service Transformation Challenge Panel of November 2014;
the role of collaborative leadership is the critical behaviour factor in successful
transformation. Without it, driving reforms across local and national organisation
simply does not work. Collaborative leadership behaviour empowers services users,
local communities and other sectors. In the specific area of procurement, strong
leadership is needed to build commissioning relationships across stakeholders,
including health, providers and people who use services. It is for strong leaders to
emphasise the importance of putting the user experience of the social and health
care systems first, and to take responsibility for service quality and outcomes.
In the report, Finding Common Purpose, the call for strong leadership came from
providers. They felt that Directors of adult services should give visible, effective, toplevel leadership to the procurement process and find ways of fostering better
relationships. This document will aim to support procurement to inform Directors in
what is possible and permissible in procuring in a person-centred way, so that
Directors can provide effective leadership in shaping care delivery.
All the recommendations within this Strategy, therefore, must be owned by local
leaders, such as Directors of Social Services and Corporate leads, to give clear
strategic commitment to innovating procurement practices.
6
[Insert Case Study V: Council X operates the Category model of procurement,
therefore procurement interfaces with the entire commissioning process, therefore
team work and communication is very effective. X ensures communications plans
are in place, pertaining to commissioning activities and that relevant steering groups
lead the change process. Each commissioning activities sets out an outcomes
framework that is informed through direct customer engagement.]
Outcomes

It is clear to local leaders that the Strategy makes some
departures from other category spends and that its
procurement processes are modified accordingly.

Local leaders will collaborate with other stakeholders to
arrive at services which are procured across different
funding streams for common outcomes based on the
needs of individuals.

Local
leaders
look
transformational,
at
rather
procurement
than
expertise
transactional,
as
and
encourage procurement input and collaboration in all
areas of the commissioning cycle.

Local Leaders actively seek to meet their duties under the
Care Act in relation to prevention, integration, cooperation
with stakeholders, development of the independent
market and promoting wellbeing; through the intelligent
and innovative procuring of services.
Recommendations

Consultation
and
engagement
with
stakeholders,
providers, health, housing and other agencies should be
standard practice.

Local authorities should consider alternative funding
mechanisms where appropriate.

Local authorities should champion the value of sharing
information and developing joint analysis.
7
Chapter Two : Outcome Focussed Procurement
Councils are dealing with significant financial pressures resulting from reductions in
government funding and rising demand. This means using spending power wisely
and strategically and setting targets for procurement and contract management by
the effective use of category management in key areas of spend. Energy, ICT and
Construction have been covered by the National Procurement Strategy and have
their own Strategies issues or under development.
This Strategy covers a fourth major spend for local authorities – social care. It is
forecasted that some authorities will be spending 40% of their available resources in
social care by 2020. This area needs analysis to provide a broad understanding of
the local government supply market. The Care Act states that in the field of social
care, local authorities must facilitate markets to offer continuously improving, high
quality, appropriate and innovative services. The Children and Families Act has very
clear principles enshrining good outcomes for children and young people and
parental preference for services. Procurement processes must reflect these
principles in the overall strategic objectives for local procurement strategies, as well
as in the nuts and bolts of contract drafting and monitoring.
[Case Study G: Contract specification outlining the collaborative approach for the
parties to provide a quality driven service to meet the Performance Outcomes which
have been set by the Council prior to entering into this Contract and which are set
out in Contract Particulars. This Contract is calling for a stepped care approach to
service users, incorporating drug and alcohol prevention, treatment and recover
services from 3 directorates that fit within the Adults and Health Category and
additionally some aligned Children’s Services contracts. It brings together a suite of
related services that are currently procured and managed separately, with a view to
aligning them and coordinating their management.]
Outcomes based procurement processes are increasingly being used to reflect the
principles of good care within the terms and conditions, as well as the specifications,
of contracts with providers. An analogy would be to contract with one’s cleaner,
whereby the outcome desired is a clean house. Traditional time and task contracts,
on the other hand, would specify how long each day the cleaner would visit the
8
home, or what discrete tasks would be performed. Although the terms of the contract
could be assiduously performed in the latter example, one’s home may still not be
clean.
[Case Study X : example of co-production of specifications of contracts with people
who use services where 15% of the value of the contract was based on the
specifications generated by the individuals using the service to be contracted]
Co-production of the outcomes of the contract need to be discussed and agreed
before the tendering process with people who will be using the developed service, as
well as providers. Agreed methods of evaluating whether the outcomes have been
met are needed, which are proportionate to the value and complexity of the care
delivery. For contracts for the care of people with complex needs, for children, and
for people who lack capacity, often Prior Information Notices (PIN notices) can be
useful. The commissioner and procurement manager, with the involvement of people
and their carers and family members, will agree on what ‘good looks like’, and then
ask the provider market to come up with their proposals on how those outcomes can
sustainably be met.
Outcome based contracts are especially relevant in implementing commissioning
strategies which are focussed on prevention and enablement. However, it is
important to evaluate contract performance only on areas where the care provider
would be expected to have a degree of influence and control. With procurement
involved in the whole of the commissioning cycle, there will be a more seamless
translation of the analysis of needs and designing of services, into the specifications
of the contracts or frameworks then developed by procurement, as well as the
contract management, monitoring and evaluation.
[Case Study F : Procurement approach : Increasing Independence for Working Age
Adults aiming to transform the services for working age adults with learning
disabilities and/or PS&I using a progressive enabling approach, ie reducing the use
of residential care, referring individuals to less costly alternatives, encouraging and
building independence via supported living
9
Outcomes

Category management helps councils to make financial
and social savings by maximising value from areas of
spend.

Councils will achieve value through developing and using
appropriate specifications and procurement processes
developed for outcomes based commissioning.
Recommendations

Procurement teams use the model Standing Order for
local government (in the Appendix) that is focused on the
values of outcome based commissioning.

Look to examples of best practice in procuring in social
and health services from across the country in order to
prevent ‘re-inventing the wheel’.
[ Insert Case Study J : Example of a procurement strategy to group together related
services and contracts based on the ability of the market to supply and not on the
basis of organisational boundaries. It seeks to support the Council realise a range of
benefits from its procurement activities relating to those goods, works and services
covered under the Adults and Health category. This includes value for money,
improved governance and assurance, improved support for the council’s wider
ambitions. The plan has been jointly developed between colleagues from the Public
Private Partnerships Unit, Procurement Unit, Public Health, Strategy and
Commissioning in Adults Social Care.]
Chapter Three : Partnering and collaboration
(This chapter has been co-written with Monitor’s Cooperation and
Competition Directorate)
10
This Strategy calls for leaders of health and social care to work more effectively
together and considers the importance of local areas partnering with local CCGs and
SCGs which provide services to their residents. Shared procurement services and
posts should allow for a more integrated service across social and health care. The
Care Act states that local authority commissioners must cooperate with each of its
relevant partners, such as NHS bodies. They must promote integration between care
provision, health and health related services with the aim of joining up services. The
Children and Families Act makes a number of bodies statutory partners of the Local
Authority in planning and commissioning services for children with special
educational needs and disabilities.
[Insert Case Study D: Integrated Personal Commissioning Programme across health
and social care, this supports CCGs vision and aims for joint working across health,
social care and advocacy services. It offers an innovative approach for people to
participate and support an initiative to bring the right support at the right time through
a s75 agreement]
In some areas there is lack of collaboration between senior management across
health and social care which is necessary to agree service needs and funding.
[Insert Case Study W: Case study of children’s care provider being stuck in the
middle of lack of communication between health and social care. Social care
commissioner agrees as part of the service provision that children are referred to
CAMSH for psychological support; however health commissioner will not clear
funding for this use of CAMSH as it is part of a social services contract. As a health
need, the funding for this was not included in the value of the service contract: While
the issue is being resolved, children are not getting the CAMSH support they need.]
On the health side of commissioning, there is a requirement for CCGs to prepare
joint strategic needs assessments (JSNAs) with local authorities to identify the
current and future health and social care needs of the population in their area. They
are also required to prepare joint health and well being strategies (JHWSs) for
meeting the needs identified in the JSNAs. Procurement officers should be involved
in these assessments, both to inform the assessments criteria so that the information
11
collected is relevant to local authority corporate procurement strategies, as well as to
use the information to inform the scope of block contracts and frameworks.
There are a number of legislative flexibilities in place to enable joint working
between NHS bodies and local authorities.
The NHS Act 2006 and ensuing
regulations enable NHS bodies and local authorities to enter into partnership
arrangements. These may involve the pooling of funds, the delegation by a local
authority of its health-related function to an NHS body or vice versa.
Regulations made under the Health and Social Care Act 2012 have been updated
and also allow CCGs and NHS England to enter into partnership arrangements with
local authority. There are several statutory options for joint financing, including:

Pooled funds, (s75 of the NHS 2006) which allows partners to make
contributions to a common fund to be spent on agreed projects or services;

Transfer payments, (s76 and s256 of the NHS Act 2006) which allows local
authorities to make revenue or capital contributions to NHS England or CCGs
and vice versa in certain circumstances.
The NHS Act 2006 also offers other flexibilities such as lead commissioning
arrangements, integrated management and the provision of services, all of which
can be combined. Lead commissioning, where one partner leads service
commissioning on behalf of another, may be a sensible option depending on the size
and make-up of the service to be commissioned. Integrated management or
provision can combine where functions are delegated to a partner to manage service
provision, or resources, staff and management are combined from senior levels to
the frontline.
NHS bodies and local authorities entering into partnership arrangements must
ensure that a signed agreement is in place to manage the operation of the
arrangement. The regulations specify what the agreement must address. These
include the agreed aims and outcomes, the particular functions subject to the
arrangement, the levels of contributions or payments to be made and the
12
arrangements in place for monitoring the exercise and/or managing any pooled
funds.
Partners must also jointly consult people who would be affected by the partnership
arrangement before they enter into it. Joint financing arrangement, such as pooled
funds, can facilitate joint working. However, they are not essential for delivering care
and support in an integrated way, and other options such as aligned budgets are
also available. Partners should focus on the difference being made for people who
use services and whether the right arrangement is in place for the service’s needs,
rather than solely on the process or structures.
By April 2016, the Public Contract Regulations 2015 will apply equally to NHS and
Local Authority Commissioners.
In terms of sector specific procurement regulations, the Procurement, Patient Choice
and Competition Regulations apply to all NHS commissioners – CCGs and NhS
England. They do not apply to other organisations that may commission health
services on commissioners’ behalf, or provide them with commissioning support or
assistance.
NHS commissioners have ultimate responsibility for complying with the regulations,
including where they have delegated responsibility for commissioning to a third party
or relied on their party support or advice. NHS commissioners must therefore ensure
that those third parties act in a way that enables the commissioners to comply with
their own duties under the regulations. This means that the NHS commissioner will
need to ensure that the local authority acts in a way with the regulations when it is
procuring NHS health care services on a commissioners behalf (for example, to
ensure that health care services are procured from the most capable provider or
providers in achieving the outcomes desired by the service users).
Any concerns over compliance with the Procurement, Patient Choice and
Competition Regulations will only be relevant in so far as the procurement relates to
NHS health care services and should be raised with the NHS commissioner.
13
The Guidance on the NHS standard contract emphasises the flexibility that NHS
commissioners have to enter into an agreement that meets the needs of their local
health economy and exhorts NHS commissioners to commission for outcomes, for
service integration, for transformation and for sustainability.iii
Outcomes

There will be effective links with health services.

Commissioners and procurement teams will understand
people’s needs and abilities across health and social
care.

Local authorities will enhance quality of services through
effective collaboration with NHS bodies or via a shared
service on common services without compromising the
need for social value and providing opportunities for local
businesses.

There will be shared objectives for health and social care
to incentivise keeping people well and safe in the
community.
Recommendations

Use the Joint Strategic Commissioning Board to include
as equal partners local CCGs where local authority
residents are placed. Ensure that procurement officials
are represented.

Make effective use of Market Positioning Statements and
Joint Strategic Needs Assessment to bridge the gap
between information, analysis of that information and
procurement strategies for local health and social care.

Understand and use integrated social and health care
delivery systems (Better Care Fund, s75 Agreements,
bespoke agreements)
14
Chapter Four : A Person Centred approach to purchaser – provider
management
There will be more flexibility in the procurement process under the Public Contracts
Regulations 2015. It is easier for procurement to echo the person centred
commissioning which has been the default position for social care for some time
now.
There will be a section showing how the Light Touch Regime Guidance
supports this approach once the Cabinet Office releases it and the general
guidance on the Public Contracts Regulations 2015.
Procurement processes must continue to adapt to bring the perspective of the
person (and their carers/family members) into the procurement strategy. This will
give a sense of ‘ownership’ of the final care delivery to the people who will be using
the services. What we are aiming for is not accumulating the complaints and surveys
about a service and then calling that ‘engagement’, (although they have their place);
what is needed is a more authentic approach to bringing the ‘voice’ of the end user
into the procurement cycle through, for example;
1. Pre tendering exercises with individuals (and their carers/family members) to
assess what needs to be commissioned/de commissioned,
2. Development of specifications of contracts in genuine consultation with
individuals (and their carers/family members), and the assignment of a
percentage of contract value to those specifications,
3. Involvement of individuals (and their carers/family members) on evaluation
panels to shortlist and award contracts,
4. Involvement of individuals (and their carers/family members) on contract
monitoring and evaluation.
The level of involvement of individuals will necessarily be proportionate to the value
and/or possible impact of the procurement process (such as decommissioning of a
service, or the commissioning of services for children and those who lack capacity).
By treating the end users as equal partners in the procurement process, echoed in
the weight of the contract value correlating to their views, the local authority can
demonstrate good practice. By understanding and participating in the procurement
15
process, individuals will have their expectations managed. More importantly, it will
enable the end users to be treated as equals in the delivery of their care. A strong
co-produced procurement cycle will also lessen the risk that the final decisions will
not be made on purely commercial grounds.
[Insert Case Study L: County Council’s contract procedure rules incorporate the
following into procurement methods for all social care contracts: Ensure services and
their procurement are user-focused and user-led; Seek to obtain the best service
possible for service users and their carers, most cost-effectively; Ensure fairness to
organisations providing or wishing to provide services; etc. Records of how decisions
made under this Rule must be maintained and a summary reported annually to the
Head of Management Audit. This ensures that there is a consistency in the
processes used and the method of recording decisions made regarding the
procurement of services.]
Outcomes

Local authorities operate simple streamlined procurement
processes that are focussed on outcomes for people
using services.

All procurement for social care services is carried out in
the spirit as well as to the letter of the new light touch
regime. (await the guidance from Cabinet Office)

Procurement
processes
and
contracts
measure
outcomes rather than simply meeting needs.

The individual service user (and/or their carers) are
involved in the procurement process as far as possible, in
terms of the design of the service and in their feedback
on the service provided.

In
the
procurement
process,
consultation
and
engagement with stakeholders, people who use services,
providers, health, housing and other agencies will be
standard practice.
16

Procurement
takes
into
account
longer
term
commissioning strategies and other sources available to
the authority, such as MPS and JSNAs
Recommendations

The specific needs of different categories of users,
including in particular disadvantaged and vulnerable
groups, should inform the specifications of contracts.

The involvement and empowerment of users should
inform the specifications of contracts.

When
deciding
what
the
most
economically
advantageous tenders are, the authority will take into
account the quality and sustainability of the offer, and its
price/quality ratio should reflect the outcomes required.

More use should be made of PIN notices to involve the
independent market’s suggestions of what can be done to
achieve outcomes.

When awarding contracts or places on frameworks, the
authority should use award criteria which are properly
linked to the subject matter of the contract.
Chapter Five : Procurement as Enabler
Our section on ‘Myth Busting’ will demonstrate that far from being the ‘no’ people in
the back room, procurement officers have in fact a body of knowledge and expertise
which is necessary for commissioners to effectively deliver the Care Act and realise
commissioning ambition.
Procurement should be seen as transformational, rather than transactional, and
should use its negotiation and problem solving skills to come up with innovative
approaches to service design, evaluation, partnership working and customer
17
engagement.
Procurement
should
be
present
throughout
the
strategic
commissioning cycle, as echoed in the commissioning cycle diagram 1.
The danger of not including procurement teams in the pre tendering stages is that in
the tendering exercise, procurement officers may have adequate information to
understand where the outcomes came from or how they were reached, and may
miss the opportunity to most effectively integrate that learning into either the
tendering exercise, or in the requests for clarification or further information. Compact
Voice states that, “VCS (Voluntary) organisations report having fantastically
productive discussions around service design and co-production in partnership with
senior managers at a strategic level, only to find that none of this filters down to
directorate or service levels where the spend actually happens – and where attitudes
can be much more antagonistic and protectionist.” iv
[Case Study T: Job Description for procurement manager whose role it was to
respond to both social care and health care commissioners: Essential requirements
included experience in personalisation and customer involvement, contribution
outcome focused performance indicators, contribution to commissioning strategies,
including joint commissioning strategies etc]
Outcomes

Procurement functions will be integral into the whole
commissioning cycle.

Procurement officers will understand the imperatives of
the Care Act and be able to reflect that in product and
process.

Procurement functions and expertise will be recognised
and supported by local leaders.
Recommendations

Procurement officers will be present at commissioning
boards and strategy groups.
18

Procurement will be consulted on whenever there are
outcomes to be achieved through the spending of council
money, even if what is being proposed will not be a
traditional contract.
Chapter Six : Development of Markets
The challenge is how to balance the push for personalisation with the concurrent
removal of the main lever that local authorities have to push for quality and diversity
in providers. If people using services are the ‘commissioners’, then local authorities
will not have the lever of money spent on contracts to push the providers to develop
certain services to a pre-ordained level. However, the levels of control that people
currently have over their own personal budgets is not well advanced, so there is
sufficient time to approach this issue incrementally, learning how to capture the key
aspects of quality as defined by people using services and scaling them up into
broader specifications of quality for providers in settings not purchased via personal
budgets.
The challenge is to develop new services locally which treat providers equally in the
area, in line with the principles of fair procurement, whilst providing the high quality
care which meets people’s outcomes.
When local authorities are trying to meet the needs of adults and children with
complex yet low incidence needs, it makes sense to develop regional procurement
strategies to coordinate the development of a care market appropriate to those
needs. However, it must be clear that regional procurement strategies is not a
licence people being housed and supported a long way away from their natural
communities.
Through communication and forecasting together with the local independent market,
providers and procurement managers together can find the best way to shape the
market which is focused on prevention, enablement, and high quality services.
Forecasting with providers will provide suppliers with the information they need to
19
develop in areas which will meet current and future demand, especially in meeting
the needs of people with complex health and social care requirements. The Care Act
states that local authorities should use Joint Strategic Needs Assessment, or similar
analyses, and work with other local partners such as the NHS to develop a broader,
shared understanding of current and future needs. Local Health and Wellbeing
Boards are the hosts of JSNAs and should work with procurement officials so that
the data and analysis generated is relevant to procurement strategies and social
care spend.
[Insert Case Study U: Council X has a unique approach based on a pre-accreditation
that delivers three levels of review, which will strategically shape and shift the market
place, so to ensure the tender is well designed, in achieving the best results for
customers but also in informing a clear sector market position statement. The
approach enables providers to submit a business plan against a specification for
change, and supports the Council in developing a narrative for service remodelling.]
This requires local authorities to take the lead on having an appropriate approach to
risk management and supporting the local independent market. It also falls on
procurement to have a streamlined procurement process around social care, so that
the interface between the commissioners and providers is clear and simple.
Having an appropriate approach to risk management; which clearly state where
and how providers are assuming a degree of risk in contracts and where
commissioners remain liable for the overall well-being of people. Duty of care cannot
be delegated and contracts must be clear on where the responsibility for people’s
safety and well-being lies, in accordance with CQC regulations.
The report Finding Common Purpose noted that the risk balance between
commissioners and providers had to be addressed. Providers felt that one common
response by commissioners to financial pressures was arbitrarily to seek reductions
in contract values and/or to require contract terms which placed much more of the
risk of delivery quality care (or at least care which was compliant with the regulatory
framework) onto providers. As a result some providers accepted low-priced contracts
or reductions in contract values in order to maintain short-term cash flow and keep
20
services going but at the cost of creating potentially unsustainable services in the
longer-term.
[Insert Case Study N: Co commissioning with children’s care provider. Outcomes
clearly defined at outset and provider will refund value of the contract if the outcomes
for the children are not met after two years.]
It was generally accepted that providers were primarily responsible for the quality of
care and support services: it therefore followed that a sizeable proportion of risk
would inevitably lie with them. However, if commissioners were defensive about risks
and so sought to load them disproportionately onto providers, this threatened not
only service quality but also the ongoing relationship between commissioner and
provider, which was likely to lead to unproductive arguments and possibly even
costly legal actions and attempts to bring judicial review cases.
Suggestions for more proportionate and fairer sharing of risks included:

The use of more effective dialogue (under the Chatham
House rule of non-attribution to encourage frankness) to
focus on the outcomes sought rather than process;

Developing local Market Position Statements which
described the roles of providers in explicit terms which
involve a fair sharing of risk; and

Commissioners
and
procurement
managers
could
present providers with an analysis of costs for similar
services, to start a dialogue on the sustainability of the
commissioners’ ambitions.
Another area of risk for providers is around innovation. Especially smaller providers
find it difficult to take the risk of developing services and training staff to meet
demand with no guarantee of getting work from the local authority.
With the
emphasis on providing for complex needs and community based crisis centres in the
Care Act, how to build capacity in the local market without asking providers to bear
the risk of that investment needs more innovative procurement procedures. PIN led
procurement and genuinely co-produced contracts between people who use
services, providers and commissioners are two ways to develop a service without
21
asking providers to develop in isolation and without guarantee of a return on their
investments.
The new Public Contracts Regulations 2015 introduces the ‘innovation partnerships’
procedure which allows the development and subsequent purchase from the same
provider(s) of an ‘innovative’ service.v This added flexibility could be a further
opportunity for local authorities to work together with the private sector to develop
new services.
However, in the final analysis, true innovation in the local care market comes from
strong relationships between the local authority and the local care market which
inform tendering exercises. Involving procurement officials in provider forums and
consultation exercises will reduce the risk that ensuing procurement processes are
counterproductive to the mutual understanding achieved through prior provider
engagement.
[Insert Case Study C; procurement exercise through a PIN notice to bring back
patients with complex needs currently in hospital, into community placements. The
main outcome being that the ‘placement would not fail’, the Council asked providers
how they would holistically meet the needs of the client, as well as accommodate
them according to their preference. This exercised used a panel of stakeholders,
including carers and staff from current hospital placement, to have a dialogue with
the providers who had indicated an interest in the contract and to fully understand
how the provider would meet the main outcome.]
Involving procurement within the whole of the commissioning cycle also resolves the
unhappy situation which can sometimes arise when the providers, during the
tendering exercise, ask the procurement officers for clarification on specifications, or
terms and conditions, and received answers which are at odds with the original
commissioning intention.vi
Supporting Local Economies. Councils need to maximise the economic, social
and environmental benefits to communities from every pound that is spent and we
believe that spend with SMEs and VCSEs can make a very significant contribution to
local economic growth. This means including social value criteria on all contracts.
22
The Public Services (Social Value) Act 2012 applies to the pre-procurement stage of
contracts for services because that is where social value can be considered to
greatest effect. The Guidance on the Social Value Act exhorts commissioners to use
the Act to re-think outcomes and the types of services to commission before starting
the procurement process. The Best Value Dutyvii, on the other hand, applies to all of
the commissioning cycle, including procurement. This Duty states that authorities
should include local voluntary and community organisations and small businesses in
their consultations around commissioning arrangements, and be responsive to the
benefits and needs of voluntary and community sector organisations of all sizes and
small businesses.
This also means improving access for SMEs and VCSEs through simplifying
procurement processes and identifying forward spend wherever possible and using
this data to inform pre market engagement and supplier planning.
(I will insert new guidance about the regulations being able to reserve some
procurements for particular provider sectors, once they are released.) Procurement
officials can also make recommendations that their local authority review their own
contract procedure rules and think about the measures by which they could
legitimately support local providers in opportunities to bid or quote for work.
[Insert Case Study S: Contract for children’s services using social value criteria; the
provider
used
Big
Lottery
funding
to
finance
summer
placements
and
apprenticeships to meet the social value criteria in the contract with Council]
Implementing appropriate streamlined procurement processes.
The Finding Common Purpose Report which was generated from discussions
between commissioners and providers of social care stated that “Procurement
seemed to be the all-pervasive source of friction between them”.
Providers
complained about bureaucracy and cost while commissioners defended the use of
framework agreements as a means of rationalising the plethora of potential providers
but worried that their loss of dedicated procurement capacity had led to a shift to
‘corporatised procurement’ with a loss of specialised social care expertise. There
was also concern that the annualised accounting systems in local government
worked against long-term investment and market development strategies.
23
There are many examples of how procurement offices can support providers to
understand the tendering exercises, through training and workshops. This can be of
particular value to new providers, SMEs and third sector organisations who can be
deterred by procurement processes.
In 2012, the Crown Commercial Services released a suite of procurement tools to
support ‘lean sourcing’ which emphasises a requirement to carry out significant
levels of pre-procurement market engagement with a diverse range of prospective
suppliers, in order to warm-up the market, test assumptions, and generate ideas for
innovation as part of the development of outcome-based specifications. It also
highlights that early engagement and joint working with the procurement teams was
a critical success factor. It stated that large complex contracts with large suppliers
should be replaced by increasing the number of contracts awarded to SMEs/VCSEs
through breaking down requirements into lots.viii
[Insert Case Study (A) of Council supporting SMEs and 3 rd Sector by ‘walking them
through’ the tendering portal and its requirements; explaining the ITT and PQQ
specifications, and explaining the award criteria]
Outcomes

Local
authorities
develop
health
and
social
care
forecasting techniques and implement them with local
independent providers to inform current and future spend
on social care.

Commissioners, providers and people who use services
are clear on the duties and responsibilities of each party.

The costs of innovation of services are be rationalised so
that independent providers do not bear the full financial
risk of developing services that individuals need.

Social value considerations are developed in conjunction
with the local market so that the locality will benefit from
the money local authorities spend on health and care.

Procurement processes are streamlined and not a
disincentive to smaller providers and VCS.
24
Recommendations

JSNAs and MPS will be developed with the kind of data
and analysis relevant to procurement strategies, and
implemented with the full participation of providers and
people using services. Local Health and Wellbeing
Boards are approached to host JSNAs. These forecasting
tools are used by commissioners and procurement when
drafting their local strategies.

Money spent by the local authority will be tied to clear
lines of accountability for the outcomes contracted for.

Development of new services and markets will be a joint
enterprise between local authorities and providers.

The Social Value Act will be integrated into contracts for
social and health care.

Procurement processes which simplify and echo the
Provider Protocol will be the norm.
Making it Happen : How LGA and NAG will support delivery
This Strategy will aim to integrate the duties within the Care Act and Children and
Families Act and will look to the Department of Health for support in dissemination.
This Strategy is also aligned with Commissioning for Better Outcomes, a joint
ADASS and LGA project, and will look to those organisations supporting the
recommendations within this Strategy. This Strategy has incorporated the concerns
of providers through Care England and the Care Providers Alliance, and it is
anticipated that social care and health providers will support the recommendations
25
herein. This Strategy has regard to the Quality of Life Standards and audits included
their overall message of people using services co-producing the services they use
into the recommendations.
On a day-to-day basis the National Advisory Group (NAG) owns the Strategy and is
responsible for overseeing its implementation including the preparation of periodic
update reports.
NAG will work with the Society of Procurement Officers in Local Government
(SOPO) and other networks to promote the approaches and good practice set out in
the strategy and will facilitate peer help and support where appropriate.
The LGA has developed a microsite for the strategy and publication of good practice
resources to support implementation. The LGA will, where appropriate, also tailor
existing programmes to align with the commitments in the strategy (including the
Leadership Academy, Productivity Experts and Peer Challenge).
i
Commissioning for Health and Social Care, Institute of Public Care, edited by Alex Clabburn, SAGE, 2014 p143
Thank you to Dr Joseph Sanderson, Procurement and Operations Management, Birmingham Business School
iii
The NHS Standard Contract: a guide for clinical commissioners, NHS Commissioning Board, page 6,
http://www.england.nhs.uk/wp-content/uploads/2013/02/contract-guide-clinical.pdf
ii
iv
Understanding Commissioning and Procurement: A Guide for Local Compacts, Compact Voice, written by
Helen Thomas, p 18
v
A Short Guide to: The New Public Contracts Regulations 2015, Pinsent Masons,
http://www.pinsentmasons.com/PDF/New-Public-Contracts-Regulations-205.pdf
vi
Procurement of Services in the Public Sector, the bidder’s perspective by David Marcer (2013, Cambridge
Academic) page 10
The rest of the document will be footnoted and referenced in the next draft
vii
Best Value Statutory Guidance, Communities and Local Government, September 2011,
The suite of ‘lean sourcing’ tools can be found at https://www.gov.uk/government/publications/leansourcing-guidance-for-public-sector-buyers
viii
26
References:
Commissioning for Health and Social Care, Institute of Public Care; Editor Alex Clabburn, (SAGE
publications, 2014)
Excellence in Procurement, How to optimise costs and add value; Stuart Emmett and Barry Crocker,
(Cambridge Academic, 2008)
Partnership Working in Health and Social Care; Jon Glasby and Helen Dickinson (Policy Press 2014)
Procurement of Services in the Public Sector, The Bidder’s Perspective; David Mercer (Cambridge
Academic, 2013)
Public Health Transformation Twenty Months On – adding value to tackle local health needs; Local
Government Association, 2015
National Procurement Strategy for Local Government in England 2014; Local Government
Association 2014
Commissioning for Better Outcomes: A Route Map; University of Birmingham, 2014
Health and Wellbeing Boards, One Year On; Richard Humphries and Amy Galea, The Kings Fund,
2013
All Together Now, Making Integration Happen; NHS Confederation and the Local Government
Association, 2014
Get in on the Act: Children and Families Act 2014; Local Government Association, 2014
Pathways Through the Maze; A guide to Procurement Law, Anthony Collins Solicitors LLP; written by
Mark Cook and Gayle Monk, edited by Jacki Reason, (NCVO and NAVCA, 2009)
A Bridge Between Two Worlds, a study of support and development organisations and intelligent
commissioning; Reshenia Consulting (NAVCA 2010)
Guidance on the new transparency requirements for publishing on Contracts Finder, Crown
Commercial Services,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/409423/contract_
finder_Guidance.pdf
A Short Guide to: The New Public Contracts Regulations 2015, Pinsent Masons,
http://www.pinsentmasons.com/PDF/New-Public-Contracts-Regulations-205.pdf
Social Care Procurement, a briefing note on procurement, state aid and consultation matters
relevant to the provision of social care services; National Market Development Forum; Think Local
Act Personal;
http://www.thinklocalactpersonal.org.uk/_library/Resources/Personalisation/Personalisation_advic
e/2011/23.6.11_SOCIAL_PROCUREMENT_DOC.pdf
27
Understanding Commissioning and Procurement: A Guide for Local Compacts, Compact Voice,
written by Helen Thomas,
http://www.compactvoice.org.uk/sites/default/files/understanding_commissioning_and_procurem
ent_guide.pdf
Procurement Policy Note – The Public Services (Social Value) Act 2012 – advice for commissioners
and procurers; Cabinet Office Information Note 10/12 20 December 2012
Best Value Statutory Guidance, Communities and Local Government, September 2011,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/5945/1976926.pd
f
Lean Sourcing: guidance for public sector buyers, Crown Commercial Service, 2012;
https://www.gov.uk/government/publications/lean-sourcing-guidance-for-public-sector-buyers
Integrated Care and Support: Our Shared Commitment, National Collaboration for Integrated Care
and Support, May 2013
Transformation of a Contract, Halo, http://www.thehaloworks.com/upload/Article-Transformationof-a-Contract-UK.pdf
The NHS Standard Contract: a guide for clinical commissioners, NHS Commissioning Board,
http://www.england.nhs.uk/wp-content/uploads/2013/02/contract-guide-clinical.pdf
Joint Strategic Needs Assessment and joint health and wellbeing strategies explained, Department of Health,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/215261/dh_131733.pdf
SCIEGuide 14: Improving outcomes for service users in adult placement: Commissioning and Care
Management, by Barrie Fiedler, http://www.scie.org.uk/publications/guides/guide14/files/guide14.pdf
Substantive guidance on the Procurement, Patient Choice and Competition Regulations, Monitor,
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/283505/SubstantiveGuidanc
eDec2013_0.pdf
The Compact, HM Government, http://www.compactvoice.org.uk/sites/default/files/the_compact.pdf
28