Modernising Commissioning: Increasing the role of charities, social enterprises, mutuals and cooperatives in public service delivery

Green Paper ConsultationDecember 2010

What does this Green Paper aim to achieve?

• Our Programme for Government commitment: “...to enable [mutuals, co-operatives, charities and social enterprises] to have a

much greater involvement in the running of public services.”

• Achieving the power shift, transferring power away from central government to local communities.

• Driving transformative improvements in public service quality and efficiency, by improving government’s ability to buy public services intelligently and make better use of all available resources.

Conclusions - Form part of a wider Public Service Reform White Paper, which will be published early in 2011.

What questions does this Green Paper ask?

1. In which public service areas could Government create new opportunities for civil society organisations to deliver?

2. How could Government make existing public service markets more accessible to civil society organisations?

3. How could commissioners use assessments of full social, environmental and economic value to inform their commissioning decisions?

4. How could civil society organisations support greater citizen and community involvement in all stages of commissioning?

The cycle of assessing the needs of people in an area, designing and then achieving appropriate outcomes.

The service may be delivered by the public, private or civil society sectors.

(i) assessing needs; (ii) identifying of the priority needs and outcomes; (iii) designing the specification which will achieve these outcomes; (iv) sourcing the providers to meet this specification; (v) managing the delivery of the outcomes; and (vi) monitoring, reviewing and learning from delivery to inform future

commissioning.

What do we mean by commissioning?

1. In which public service areas could Government create new opportunities for civil society organisations to deliver?

Objective: To drive efficiency, effectiveness and innovation in public service by opening more public service areas to civil society organisations.

• 3 key elements, outlined in SR10 to increase the diversity of provision, levels of competition and consumer choice:

a) Consider setting proportions of specific services to be delivered by independent providers;

b) Introduce payment by results across public services; and

c) Introduce new rights for communities and public sector workers

Q1(a): Which public service areas could be opened up to more civil society organisations?

• Look at setting proportions of certain service that should be independently provided.

• Key role for civil society organisations.

Factors: • Current market status; and • Planned reforms to open up the market.

Objective: To improve outcomes and performance by stimulating and growing a diversity of provision across public services, which may be maintained and

developed through longer term intelligent commissioning.

Q1(b): What are the implications of payment by results for civil society organisations?

• Benefits: Great innovation and flexibility in delivery models, as payment is linked to outcomes achieved, rather than the inputs or outputs of a service.

• Challenges: Access to working capital.

Example: MoJ Social Impact Bond pilot at HMP Peterborough• Aim: To tackle the high rates of reoffending associated with offenders released

from short-term prison sentences. • CSO services are financed through social investment to deliver intensive

support to 3,000 short-term prisoners over a six year period. • If this initiative reduces re-offending by 7.5%+, investors will receive a dividend

payment of up to 13 % of their original investment, funded by savings generated in the CJS.

• If the reoffending rate falls by less than 7.5%, the investors will receive no return.

Q1(c): What issues should Govt consider in the progression of the ‘right to challenge’ with regard to civil society organisations?

• Localism Bill: CSOs and local authority employees will be given the ‘right to challenge’ local authorities where they believe they could provide services differently or better.

• Further details will be announced shortly and Government will be consulting on the detail of how the right challenge will work.

Other Questions:• Should Government explore extending the ‘right to challenge’ to other local

state-run services?• If so, which areas and what benefits could civil society organisations bring to

these public service areas?

Q1(d): How can we encourage more existing civil society organisations to team up with new employee-led mutuals?

Our Programme for Government: ‘To create a right for public sector workers to form employee-owned cooperatives and bid to run the services they deliver.’

• ‘Rights to provides’ across the public sector and civil service workforces• Potential for partnerships and joint ventures with existing civil society

organisations.• This work will open up new areas of public service delivery to competition and

the involvement of a diversity of providers.

Example:

2. How could Government make existing public service markets more accessibly to civil society organisations?

Objective: To address practical, regulatory, legislative and cultural barriers to market entry in existing markets.

Q2(a): What are the key issues civil society organisations face when dealing with TUPE ? What could Govt do, within existing legislation, to resolve these problems?

Govt Commitment: To review guidance to enable greater compliance with and understanding of TUPE.

Reported Issues:• Accessing Information: The actual cost of transferring staff are often unknown

at the bidding stage. As such, organisations can over price or under price for the cost of the service

• Managing Costs: It is expensive for small organisations (inc. CSOs), to provide staff benefits that are comparable with the public sector, such as pensions, sickness pay, redundancy etc.

• Complexity: Lack of HR knowledge and understanding of TUPE, for both receiving and transferring organisations, can significantly affect the success of the transfer.

Q2(d): What issues affecting civil society organisations should be considered in relation to the extension of the Merlin Standard across central government?

•Smaller, specialist organisations can often feel marginalised and stifled.

•DWP Pilot of Merlin Standard – a new supply chain management standard that prime contractors will have to meet.

Aim: Recognise excellence in supply chain management and incentivise larger prime contractors to invest in the capacity and performance of their

delivery partners.

3. How could commissioners user assessments of full social, environmental and economic value to inform their commissioning decisions?

Objective: To enable commissioners to make strategic commissioning decisions on the basis of a full understanding of the social, environmental

and economic impact.

Q3(a): What issues should Government consider in taking forward the Public Services (Social Enterprise and Social Value) Bill?

• A full understanding of value should underpin payment by results.

Public Services (Social Enterprise and Social Value) Bill:

• Requires all contracting authorities to consider all relevant and proportionate economic, social and environmental value.

• Requires commissioners to consider whether to consult the intended beneficiaries of the service in order to identify relevant wider value.

4. How could civil society organisations support greater citizen and community involvement in all stages of commissioning?

Objective: To enable civil society organisations to support and facilitate the increased involvement of citizens and communities in commissioning.

Vision:

• To push power as close to individuals as possible;

• Citizens and their communities should define the priorities and expectations of the public services; and

• Civil society organisations play an important role in facilitating, brokering and support their involvement.

Q4(a): What can civil society organisations contribute to the roll out of community budgets?

• Pool departmental budgets and enable the redesign and integration of frontline services across organisations around families with complex needs.

• Aim: to create the funding arrangements which will allow for greater accountability to local people and flexibility across boundaries in health, policing, worklessness and child poverty.

• Civil society organisations have a role to play in facilitating and supporting community involvement and the delivery of public services.

• SR10: 16 local areas to lead the roll out.

• Ambition: All places will operate Community Budgets by 2013.

Q4(b): What can civil society contribute to the roll out of Local Integrated Services?

Aim: To use the enhanced accountability and flexibility of community budgets to unlock the potential of communities to design and deliver a genuinely joined

up approach to multiple challenges like health inequalities, an ageing society, crime reduction, poor housing and worklessness.

• Contracts will be won by organisations that convince the community that they can deliver a service that meets local needs and priorities.

• Local Integrated Services Principles: 1. Use the enhanced accountability and budgetary flexibility;2. Develop services from the bottom-up;3. Co-design service solutions with the community and service users;4. Create a genuinely joined-up approach.

• Developed in conjunction with Turning Point, local government and civil society organisations in nine localities.

Q4(c): What contributions could civil society organisations make to the extension of personal budgets across a range of service areas?

• SR10: Significantly extend the use of personal budgets across a range of service areas.

• Areas include: Special education needs, support for children with disabilities, long-term health conditions and adult social care.

• Particular role of user-led organisations.

ocscommissioning@cabinet-office.x.gsi.gov.uk

Public Services Team, Office for Civil Society, Admiralty Arch, The Mall, London SW1A 2HW

Deadline: Wednesday 5th January 2011.

How can you contribute?

Coming back to the questions...

1. In which public service areas could Government create new opportunities for civil society organisations to deliver?

2. How could Government make existing public service markets more accessible to civil society organisations?

3. How could commissioners use assessments of full social, environmental and economic value to inform their commissioning decisions?

4. How could civil society organisations support greater citizen and community involvement in all stages of commissioning?