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