Better commissioner relations

I'll get it out of the way early: I think the Lloyds Bank Foundation assessment of public sector commissioning is a bit of a hatchet job (see box). There is always bad practice in any sector, but a compendium of exceptions presented as the norm is too "post-truth" for my liking.

Having defended my profession, we have further to go. And because children's services commissioning and procurement are so complex, it's taking time to reach maturity.

All commissioning begins with an outcome for a child or young person. Outcomes are complex, requiring different services and co-production with the family. And outcomes are difficult, if not impossible to measure - so we use outputs (or worse inputs) to assess progress.

Challenges for commissioners

There are a couple of challenges for the diligent commissioner: to identify the right outcome (or ask the right question); and to put the right measures in place that do not incentivise gaming or focus on things that add no value to the child.

Once we know the outcome and measures, we often discover that a service is only a small part of the answer. So commissioners have a choice: to try to enable the package of things that support the outcome or to pretend the world is simple and purchase a standalone service.

Commissioning is deciding how to use the total resource available to improve young people's outcomes in the most efficient, effective and sustainable way.

Then if the answer is to procure a service (and only a small amount of commissioning leads to procurement), then European Union law and internal rules put constraints on what we can do.

Commissioners are becoming increasingly confident to make the rules work for the outcomes we need for the population, but this takes some bravery, and understanding the market and threat of challenge. Unfortunately, the easy option is often low-risk.  

We then need to align the child or family with the incentives of the provider, and commissioner and politicians to get the best outcomes.

Children in care procurement is one example of where this can go wrong - the model we've set up sometimes  incentivises providers to over-emphasise a child's needs (because it generates more income), keep a placement for as long as possible (improves cashflow) and reduce service quality (boosts profit margin).

Of course, I'm not saying that providers act like this - they are caring and committed to children - but these are the incentives local authorities have created. A smart commissioner can create other incentives - for instance, through user choice, competition for each placement or payment by outcomes.

But more often than not, commissioners face intractable challenges, not least reducing budgets and increasing demand. A good example is children's mental health where 24 per cent of young people have a diagnosable or additional need, but we have a service for one per cent.

So for children's mental health services, commissioning is the tool to apply systems thinking and transform services. Commissioners could create a compelling and simple transformation narrative - co-design it with young people; engage with thousands of teachers; change access points to services; skill up parents and universal services; build digital help and online peer support; target hidden need; streamline access points and cut waiting times; and make services more compassionate.  

Key recommendations

My five top recommendations for how charities can improve how they work with commissioners are:

1. Show how you improve outcomes
   Funding for children's services is being cut in half from 2010 to 2020. The market will shrink and consolidate, but this doesn't mean bigger is better.
2. Embrace the digital revolution
   If you think this won't affect your charity, pack up now. What services can you offer online? How can you innovate to significantly improve your return on investment? Small community resilience projects will be a growing market.
3. Love contracts, not grants
   Grants do not give any legal protection for the provider that, in a post-Brexit time of uncertainty, can leave you in a sticky position. A short contract is better. Also, spread your risks and diversify funding sources.
4. Develop relationships with commissioners and procurement
   If it makes sense for users, there is often a way to make something happen via exceptions to rules.
5. Demonstrate real social value
   Commissioners are awarding tenders to those who can weave social value through their offer - show your winning impact to local communities, the environment and family resilience.

Findings from Lloyds Bank Foundation research

• The Commissioning in Crisis study looked at the experiences of small charities that had taken part in 120 tenders run by public sector organisations
• Charities reported experiencing poor commissioning practices, including bureaucratic, complex and inappropriate requests by commissioners
• Problems were widespread and the system was found to routinely discriminate against small charities, preventing them from competing fairly or being deprived of funding
• The foundation calls for the process to be simplified and for more collaboration between commissioners and providers
• It is also calling for central government to challenge poor commissioning practice and to hold commissioners to account

Source: Lloyds Bank Foundation

• Richard Selwyn is a sustainability and resources committee member, Association of Directors of Children's Services