Commissioning

Commissioning has become a commonly used term as we see more diversity in who delivers public services. But it can be difficult to pinpoint what it means. There are a range of different definitions, which can cause confusion among voluntary & community sector (VCS) organisations.

Commissioning is the term used to describe the process of investigating local needs and then procuring (buying) services to meet those needs. This is a multi-facted process - it includes calculating the needs of a local area, planning service provision, building capacity and developing the market, procuring goods and services, and then monitoring contracts to ensure services are being delivered to a high standard. Commissioning includes both the giving of grants and the awarding of contracts for public service delivery.
 
Locally, commissioning is carried out by local authorities (e.g. Southwark Council) and NHS Clinical Commissioning Groups (e.g. Southwark CCG). Health & Wellbeing Boards are responsible for setting a framework which local health commissioning needs to comply with. 
 
While the council’s budget is falling, it will continue to commission an array of services over the next five years. This will be an important source of income for VCOs but there will be challenges. The Council is conducting a procurement review, and asking whether more services should be provided by the council itself (in-house). There will be more pressure on contractors to demonstrate the quality and value of the services they provide
 
The VCS has a role to play not just in providing services, but also in informing commissioning and getting involed with mapping local need. VCS organisations are working on the frontline, regularly engaging with service users, and they have key knowledge required to make sure services are commissioned which prevent people from falling through the gaps.
 
It is vital that the VCS develops an understanding of commissioning processes.
 

Value for money, added value & social value

Ensuring value for money is a key council priority. VCOs bidding for contracts will have to demonstrate the difference they make for every £1 received. A significant development in commissioning may be additional payments for providers who achieve set outcomes (payment by results). Organisations that can clearly demonstrate added value (offering a better or more extensive service at similar cost) will be at a further advantage.

Under the Social Value Act, when commissioning services, the council and CCG have a duty to consider the additional ‘social value’ (including environmental and economic value) providers can bring, often going beyond the core purpose of the contract. Community Southwark has established a joint working group with the council to scope out how this should happen.

Due to the ongoing cuts, only services that clearly and persuasively demonstrate value for money will receive council or NHS funding. VCOs often claim they bring added value or social value, but are not always good at demonstrating this robustly. Work with Community Southwark to improve your skills around measuring and demonstrating the impact of your work.

Contract size and length

Nationally, there is a trend towards larger contracts, in order to make savings through economies of scale and lower contract management costs. Small and medium-sized VCOs often struggle to win these contracts and the council may be more likely to commission services through consortia of multiple organisations. Likewise, short (e.g. 1-year) contracts give commissioners flexibility and avoid the risk of being tied into a contract with a poor quality provider. However, short contracts make it difficult for VCOs to plan ahead and retain or invest in staff.

There is also pressure to increase the quality of collaborative working. There may even be additional payments linked to a consortium achieving joint outcomes. Those VCOs that are prepared to work positively with other organisations (including in the public and private sector) are more likely to thrive.

To win council contracts, VCOs need to work more in collaboration with other VCOs (and with public and private sector organisations). Forming a formal consortium with other groups requires time, resources, new skills and knowledge, and entails some as organisations must be open about working practices and costs.  Community Southwark can support you to collaborate with other organisations.

Contact development@communitysouthwark.org.uk for more information on Community Southwark's work around commissioning. 
 

Community Southwark Useful Resources

 

Community Southwark Resources - Collaboration: fact sheets and resources looking at how you can work in collaboration

Community Southwark Resources - Income Generation: fact sheets and resources to help you generate income across the income spectrum.

Community Southwark Resources - Managing your finances: fact sheets and resources to help you get your financancial management in order ready for commissioning

Community Southwark Resources - Planning your future needs: fact sheets and resources to help you get on with strategic planning, business planning and much more.

Contracts & Commissioning – Voluntary and Community Sector Key Terms Glossary: A glossary containing definitions of some of the words you may hear when discussing or reading about commissioning. 

Presentation from Joint Forum (July 2014) on Southwark Council's All-Age Integrated Commissioning Strategy.

What are commissioning, procurement and contracting?: a brief factsheet introducing you to the fundamentals the commissioning process

 

External Resources

 

NCVO: Commissioning and Procurement: This NCVO page contains some general information around commissioning and links to how-to guides.

The Nuffield Trust: Role of the Voluntary Sector in Providing Commissioning Suppport: This report from the Nuffield Trust explores the role of the voluntary sector in providing commissioning support

National Audit Office: Successful Commissioning Guide: These pages from the NAO provide information for the VCS about the commissioning process and what they should expect from financial relationships with the public sector.

Compact Voice: Understanding Commissioning and Procurement: A Guide for Local Compacts: This guide provides information onthe commissioning cycle and tips for how the VCS can work with commissioners. 

Southwark Clinical Commissioning Group: Information about the work of Southwark CCG.