This morning was the ninth workshop in the Whitehall and Industry Group’s Innovation in Delivery series, and the topic of discussion was ‘The Ingredients of Effective Commissioning’.
I’ve been to several events on a similar theme over the last 18 months or so, but this one stood out for the quality of speakers, the real life examples they used, and the depth they went into about challenges faced and ways of overcoming these.
Here is a quick summary of the key ‘ingredients’ for effective commissioning that I took away:
• We all know it but reality doesn’t always bear this out – commissioning is not the same as procurement. Commissioning has to start with in-depth analysis of the outcomes you are trying to achieve and the issues to address. This analysis absolutely should involve service users themselves, and they should be involved in every stage of the commissioning cycle.
• Using this customer insight, commissioning should always be outcome-focused. Be very specific about the outcomes the commissioned service needs to affect, and be clear about what both success and failure would look like, to help bring these outcomes to life.
• Carry out careful analysis of the interventions or activities that will have the most significant impact on your identified outcomes, and don’t assume what these interventions might be – you need evidence from service users and from providers to support the proposed service model. This information will help you specify the new service in the right way, but it is also important to allow providers sufficient flexibility to choose how they think they can best deliver the identified outcomes.
• Measuring the success of outcome-based contracts is not easy, but can be facilitated by breaking down long-term outcomes into shorter-term outcome and output stages, to help measure impact along the way. For example, if your long-term outcome is to get people back into work, your shorter-term outcomes might relate to developing skills and qualifications which should help lead to employment. Use your providers to help you identify the most suitable measures.
• Similarly, just because you have an outcome-based contract doesn’t mean that you can forget all about traditional activity measures. If you are letting a contract for home care for example, your ultimate outcome might be reducing dependency on support and preventing admissions to residential care, but monitoring input measures such as number of service users supported is still important for checking quality and quantity of service.
• Remember that commissioners’ behaviour drives and defines the behaviour of providers. If you drive cost down relentlessly, pay and conditions of provider staff will be affected, and the quality of service with it. More innovative commissioning, in partnership with service users and providers, can break this cycle.
• Payment by results can be very effective, and is becoming more common, but the ‘machinery’ around these contracts is also increasing. Keep PBR contracts and payment mechanisms simple. Also, ensure you have a full view of the total cost of the contract – PBR is likely to cost the commissioning organisation more in the long run, as you pay a premium for providers bearing the risk and delaying their payment.
Many thanks to Nicholas Sharman (NLGN), James Cuthbert (talking about his work at Wiltshire Council), Yvonne Thomas (Interserve) and all at WIG for a thought-provoking session.