Leadership: The key to better contracts
Javed Khan
Tuesday, October 31, 2017
Dwindling budgets increasingly means pressure to prioritise cost-effectiveness over quality when deciding contracts, but a collaborative approach with providers can ensure sustainable solutions.
Commissioners increasingly ask that we "prove" impact, yet the very terms of their contracts undermine charities' ability to do so. With the public service market becoming increasingly fierce, with ever-tighter margins and ever-shorter contracts, it is easy for voluntary organisations to fall into the trap of moulding our work to fit the contract. Yet at what cost does this come for the people we serve? Staying true to our charitable objectives and the changes we know are needed in our communities demands that we make difficult decisions.
1. Don't be afraid to walk away from a contract. There's no mistaking that a "race to the bottom" in price is being played out in public service commissioning. Barnardo's wins four out of five contracts that we bid for but that doesn't stop us walking away when the resources or conditions set by the commissioner mean we are not able to do what needs to be done. We know what vulnerable children need, we know what it costs to provide it, and we won't do it for less. Leaders may worry that leaving a contract may damage their organisation's reputation, but surely delivering substandard work has the potential to do much worse?
2. Fully assess and understand contract risks. There is never a good time to leave a contract. We are careful to assess all risks and only enter into contracts that allow for us to safely and effectively deliver services to improve outcomes. Sometimes changes to the financial envelope and service scope are difficult to absorb or mitigate and increase delivery risks. Examples of contracts where it would be right to leave include short, 12-month contracts, sometimes offered as extensions, often loaded with pensions and other staff risks.
3. Good communication with commissioners is key. Just because we don't take on these contracts, doesn't mean that someone else won't come in and fill the gap, and what does this mean for children? It is unsustainable.
The model we have at the moment sees a problem identified by the few; a solution developed by even fewer; a scramble of competition with precious funds spent; and just one winner at the end.
We need a model that allows for sustained interventions with children over a long period, with trusting relationships at the core. Robust, long-term relationships built on trust and credible, high performance are the best foundations for developing more collaborative relationships. Honest and grown-up conversations in which parties talk as true equals will help foster these.
It must be a model that avoids the "sticking plaster solutions" that short-term contracts incentivise.
4. Start conversations with commissioners early. The way forward is to work with commissioners from the start. Consider charities working with commissioners, from the very beginning, to identify the challenges within local communities, to shape the best solutions and to design new services.
Commissioners are starting to see the need for a different approach. Strategic partnerships like the one Barnardo's has developed with Newport City Council, where half the staff are Barnardo's employees working with our council partners in the same office, are developing all over the country.
They differ from place to place and no one size fits all. In one area it may be better suited to the needs of a population to work as a sub-contractor with partners from other voluntary organisations. In another, working with the private sector might better deliver what is needed. Local authorities, police, voluntary and commercial organisations all have a role to play.
5. Demonstrate a shared openness to debate. Commissioners are looking for high-quality cost effective solutions. They are interested in new and different approaches to deliver services based on evidence, impact and clear rationale. Demonstrating that the solution is child-focused and leads to a more efficient and better customer experience is the way to reassure commissioners that organisations are aligned and share a common vision, endeavour and purpose, and that there is a shared openness to debate.
The best way to get people around the table is to demonstrate what value you can add to what they do. It's about trust and openness, working in partnership. This might be counter-cultural to some organisations so people will need to be brave and bold enough to embrace a different way of doing things.
The current model of public service commissioning is not sustainable. We must build a new one entirely and do this by bringing the unique insights and expertise of local authorities, health agencies, police forces, voluntary organisations and commercial bodies to bear. Only then will we be able to truly transform lives of the people and communities we are here to serve.