In last month’s article we discussed evidence of diverging trends in the children’s social care sector – local authority commissioning arrangements appear to be fragmenting while the larger provider organisations continue to grow and consolidate the supply of provision.
With a Care Review pending, the state of commissioning and supply in children’s services has been suggested as an area that should be within the remit of the review. The implications for commissioners and providers arising from the divergence needs analysis and further research. Some of the impact is however already evident.
Purchasing power
At a simple macro-economic level as commissioners disaggregate their combined purchasing power, they also begin to lose the ability to influence and shape the supply side of the sector. Whereas historically when a significant number of councils came together to commission (for example, West Midlands, North West Placements, Pan London) the perception of providers was predominantly that they needed to engage positively with commissioning efforts of those large groups. There is now increasing evidence that providers are opting out of engagement with the newer and smaller commissioning groups.
This is particularly the case where the activities of those smaller groups are essentially similar to the framework and dynamic purchasing system approaches of larger predecessor regional commissioners. Provider organisations increasingly report the experience of no decrease in referral levels to their services if they opt to remain outside of commissioned frameworks and therefore they look to avoid the administrative burden of responding to long, complex and sometimes intrusive tender processes arriving from an increasing number of small sub-regional groups of authorities.
An exception to this trend is the Commissioning Alliance that has taken a position aiming to reverse the fragmentation of children’s services commissioning, which it sees as adding to duplication of efforts related to contracts, monitoring, standards and procurement. The Commissioning Alliance recognises that to influence the sector more effectively councils need to stop competing with one another through bidding wars for scarce resources and instead come together to use efficient market access tools to explore, together with providers, more effective commissioning models based on aggregated needs data.
There is a spectrum of views on the provider side about commissioning, and it is clear from our research that experiences are far from uniform. Size and resources of the provider sometimes determine their ability to respond to an increasing number of smaller localised commissioning exercises. Larger providers with national scale to their services and more extensive internal resources dedicated to the task of responding to multiple, differing commissioning activities around the country are more likely to respond to invitations to engage. However, even in the larger groups there are those taking a strategically different approach and choosing to remain outside of most frameworks that offer no guarantee of placements.
A fixation with price control, onerous costing schedules, a lack of balance in terms and conditions and a plethora of difficult-to-use procurement portals in some commissioning arrangements also act as disincentives to engagement among some providers. The increasing number of variations of terms and contracts and monitoring processes that emerge from the fragmenting efforts of councils are likely to be bewildering for smaller providers. Small providers of highly specialised services that support young people with high needs from all around the country tend to report high occupancy and referral rates, and sometimes waiting lists, without needing to engage with the whole patchwork of commissioning efforts.
It is perhaps not surprising to find that the commissioning sector has struggled to move away from the predominant spot purchasing of placements model, and that more innovative approaches such as soft blocks and other risk-sharing approaches remain a small minority of purchasing activity.
Impact on children
The impact on children of the divergence of commissioning and supply trends is more difficult to trace directly. There have been almost no independent studies looking for example at the impact of commissioning on quality of service and outcomes for children. Indirectly, inefficient spending of limited resources clearly means there is less resource to spend on the whole population of children in need.
Against this background, the view of children’s services leaders is that market forces alone cannot address the challenges faced in, for example, residential care for children, and they call for more funding for local authorities to help address the issue.
I would agree that there is a need to analyse the relative merits and roles of local, regional and even national commissioning at a granular, needs-based level, and to consider a more radical redesign of the way that the purchasing and supply sides of the children’s services sector interact. Different levels of strategic and commercial skills will be required on the commissioning side to bring about this redesign, but providers, especially the smaller and voluntary sector organisations, will also need support to be able to engage in a meaningful way with any pilots and new approaches emerging from such redesign.
Commissioners and providers also need to come together in a coherent way to look at how public procurement regulations are applied to the sector, and, if necessary, make recommendations to the government about the redesign of those rules or to partly or wholly disapply those rules where they are a barrier to more effective commissioning.
Andrew Rome is director of Revolution Consulting
