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Commissioning, procurement, purchasing and third sector commissioning. presentation to ACCA Pubic Sector Managers forum, London, 5 May 2010
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Commissioning, procurement, purchasing and third sector commissioning
Dr Gordon Murray
ACCA Public Sector members5 May 2010
Better outcomes for individuals & communities
Better outcomes for individuals & communities
Efficiency gains
&community
benefits
Smarter Commissioning
(more innovative & effective)
Commissioning
“Commissioning is the cycle of assessing the needs of the people in an area, designing and then securing
the appropriate service”(Cabinet Office, 2006, p. 4)
Strategic needs assessment
Decide priorities and outcomes
Plan and design services
Optional appraisal
Sourcing
Delivery
Monitor and review
The commissioning
cycle
The commissioning cycle
The purchasing cycle
Determine the need
Supplier selection
Contracting
Ordering
Expediting
Follow-up/evaluation
The purchasing
cycle
(derived from van Weele, 2005)
Strategic needs assessment
Decide priorities and outcomes
Plan and design services
Optional appraisalSourcing
Delivery
Monitor and review The
commissioning cycle
The commissioning and purchasing cycles
Determine the need
Supplier selection
Contracting
Ordering
Expediting
Follow-up/evaluation
The purchasing
cycle
Strategic needs assessment
Decide priorities and outcomes
Plan and design services
Optional appraisalSourcing
Delivery
Monitor and review
The commissioning
cycle
The commissioning and purchasing cycles, and procurement
Determine the need
Supplier selection
Contracting
Ordering
Expediting
Follow-up/evaluation
The purchasing
cycle
procurement
A shift to outcomes based commissioning,
co-design and co-production must release innovation and
remove waste
Third sector commissioning
Who are the Third Sector?
• Voluntary and community organisations
• Charities• Social enterprises• Mutuals, and • Cooperatives
Benefits of the third sector
• Specialist knowledge, expertise and/or skills• Ability to spot emerging trends• Involving people in service delivery• Independence from existing structures and
models• Reach the hard-to-reach• Freedom and flexibility from institutional
pressures• …
Common barriers
• Short-term funding• Excessive risk placed on providers• Unrealistic prices• Excessive burdens of monitoring and
evaluation
Commitments to overcome barriers
• The Compact• Small Business Friendly Concordat• Eight principles of good
commissioning
The Compact
• Full Cost Recovery• Proportionate information requests• Advance payments, where
appropriate• Three-year funding• Proportionate monitoring• Adequate notice
Compact breaches
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2005 2006 2007
Funding & procurement code
Consultation & policyappraisal
Community groups
Black & minorirty ethnicorganisations
volunteering
Compact (overarching)
The Concordat
• Contracts supported by a sound business case and options appraisal
• Keeping tender processes simple• Payment in 30 days• Ensuring sub-contractors also pay
within 30 days
Eight principles of good commissioning
1. Understand the needs of users etc., by engaging with TSOs as advocates to access their specialist knowledge
2. Consult provider organisations when setting priorities
3. Put outcomes for users are the heart of the process4. Map the fullest practical range of providers5. Consider investing in the provider base6. Ensure contract processes are transparent and fair7. Ensure long-term contracts and risk-sharing8. Seek feedback to review effectiveness of the
commissioning process
53%
47%
Yes
No
Are procurement and commissioning just different names for the same thing?
Are procurement & commissioning the same thing?
Commissioning is fundamentally about specifying the services/outcomes desired. Procurement is fundamentally about ensuring that those services/outcomes are delivered…
They are the same if procurement is defined as the process from identification of need through to disposal of asset or decommissioning of service. Commissioning focuses on the identification of need.
Commissioning & purchasing are both aspects of procurement. They are the same process – each has its own processes within the overall procurement framework…It’s not helpful to have different phrases for what essentially are the same process, yes, in reality there are differences but not significant enough to warrant a ‘my approach is better than yours’ attitude.
My qualification is 'purchase and supply' it's the government that seem to need to waste time and money faffing with different names.
Significant commissioners embedding of policy commitments
0
10
20
30
40
50
60
70
Unaware
Aware
but n
ot in
deta
il
Worki
ng a
waren
ess
Embe
dded
in p
olicy
Embe
dded
in st
rate
gy
Embe
dded
in p
roce
dure
s
Embe
dded
in p
erfo
rman
ce m
anage
...
Compact Code of Funding &procurement
8 principles
English council procurement leads engagement
0
2
4
6
8
10
12
14
16
18
Compact Code 2 0 16 2 6 3 1
Concordat (L gov't only) 1 1 15 5 6 4 2
8 Principles 0 3 15 3 1 2 1
Unaware of them
Aware of them but
not in detail
Working awareness
of it
Embedded in
procuremen
Embedded in
procuremen
Embeded in procedures
Embedded in
performance
Conclusions
1. Commissioning and third sector commissioning are hot topics
2. Shift to outcomes based commissioning, co-design and co-production should deliver improved service and cost reduction
3. Misunderstandings on difference between procurement and commissioning
4. Lack of embedding in Compact Code, Small Business Friendly Concordat and 8 Principles in policy, strategy, procedures, and performance management
Commissioning, procurement, purchasing and third sector commissioning
gordon.murray@idea.gov.uk www.slideshare.net/DrGordonMurray
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