STAGES OF COMMISSIONING

Source: Joint Reviews

Agree the strategic framework

• Locate the commissioning of social services within the corporate local authority framework for procuring services
• Clarify councillors' oversight in approving commissioning strategies and scrutinising their impact - see Roles
• Establish the current political parameters to the development of commissioning. For example the degree of investment in the independent sector and any limits on joint commissioning with Health and/or other local authorities
• Identify lead commissioning managers for each user group with associated business support teams, drawn from all the support services
• Confirm the medium-term financial assumptions on which commissioning strategies are to be based
• Negotiate an annual commissioning round that is as synchronised as possible with the other main commissioning bodies, such as Health, to maximise the scope for collaborative commissioning
• Clarify the level in the authority at which different services are to be commissioned, with the emphasis on devolving responsibility as close as possible to users/carers
• Negotiate a process for engaging with users and carers and other non-commissioning stakeholders, recognising their rights to influence and to monitor performance
• Set out the medium-term objectives to be achieved through the commissioning process and how progress towards their achievement is to be monitored

Analyse the data on needs and preferences

• Review the current 'fit' between needs and services
• Project forward the future service requirements of existing service users with increasing needs and calculate the rates at which people will cease to require services
• Make medium-term projections of known future needs for example registers of children with disabilities
• Start to build predictive planning models of the types and levels of need to be addressed in the medium-term future and the trends in choices for meeting those needs
• Compare referral/demand trends against census and other demographic data in order to distil the commissioning implications of this information
• Commission supplementary research of key areas
• Quantify the proportions of social care needs being funded by the local authority, by other authorities and by users and carers themselves in the different service sectors, so as to gauge the market share and, therefore, the level of purchasing leverage of the authority (see Exhibit 9 below)

Build up knowledge of the social care market

• Plot the geographical distribution of services relative to assessed need (see Kent Market Mapping)
• Evaluate the spare capacity and potential for development of existing providers
• Research the availability and readiness of other potential providers
• Form a judgement about current and future risks to supply, for example, staff recruitment and retention, debt burdens etc
• Identify and prioritise gaps in services
• Assess the impact of new service providers and examine the reasons for service closures

What is the cost and quality?

• Evaluate inspection and other regulatory reports and collate with other feedback from contract monitoring to evaluate the overall quality of services
• Analyse the outcomes achieved by providers, relative to price
• Keep track on the price trends in the independent sector and on their budget pressures
• Keep abreast of national costing models by Laing & Buisson and the Personal Social Services Research Unit (PSSRU), University of Kent

How does it compare?

• Collate the intelligence into an annually updated market analysis by service sector with trend projections for the next three years
• Compare the level and quality of service supply with that of similar authorities
• Assess the relative bargaining power of the providers in each service sector (see Exhibit 10 below)

Consult

The public: Consult with the public on the adequacy, choice and quality of current services and their level of awareness of the services available.

Service users and carers: Maintain ongoing consultation with service users and their carers through a variety of means: surveys, forums, user committees and individual/group interviews. Analyse trends in complaints and compliments alongside the comments from case reviews.

Agencies and advocacy organisations: Obtain feedback from the main referring agencies and advocacy organisations because they play a significant role in framing user/carer expectations.

Staff: Consult systematically with all staff including:

• assessors, care managers, reviewing officers
• operational managers
• information/planning officers
• finance officers
• performance management/audit staff
• legal advisers
• commissioning and contracting staff

Corporate managers: Consult formally with other corporate managers within the local authority on respective commissioning strategies.

Other statutory agencies: Consult with the chief officers and commissioning leads of other statutory agencies in the early stages of formulating commissioning strategies.

Service providers: Consult with service providers from all sectors in formally programmed meetings to identify the threats and opportunities, the risks and pressures in the market and how purchasing power may be used to best effect in shaping that market

Consider holding periodic conferences bringing together all the relevant stakeholders for each user-group to promote some cross-fertilisation of thinking.

Determine service objectives and priorities

• Draft short (one year), medium (three year) and long term (five year) objectives for the services serving each user group
• Identify any common or cross-cutting objectives across user groups (for example Supporting People)
• Take into account the objectives of other commissioning bodies before finalising your own
• Confirm that service objectives are aligned with medium-term financial plans
• Express objectives, wherever possible, in terms of measurable improvements in users' and carers' lives, for example proportionate increase in those enabled to live independently
• Define the social care outcomes to be achieved in any integrated services with Education, Housing or Health

GOOD PRACTICE TIPS

Get your priorities right Prioritise services that rehabilitate and re-able, addressing not only practical needs but also key emotional and psychological needs. Aim to reduce dependency, while enhancing quality of life Target preventative services on known predictors of future needs for example high stress levels of carers Have a bias towards flexible, non-buildings-based services Ensure your eligibility criteria are in line with your objectives Increase the use of standardised assessment tools, which, periodically applied, can measure improvements in independence and quality of life Set measurable time-limited goals in all care plans that are consistent with your service objectives

Undertake an option appraisal

• Establish a standard procedure for undertaking option appraisals, setting out the contributions to be made from the different business support functions
• Confirm political agreement at the outset and keep key members informed throughout the process
• Involve relevant stakeholders to assist in ownership of the final outcome
• Define the criteria to be applied in identifying the preferred option
• Take the meeting of needs as the starting point and not the existing range of services
• Be rigorous in identifying the advantages and disadvantages of each option
• Ensure that the costings are comprehensive and comparable
• Undertake a thorough risk assessment of all the required processes and resources, human and financial - see Financial Management
• Test out the acceptability of the options with other stakeholders, especially the users and carers to be affected by the options under consideration
• Frame recommendations in terms of a business case to deliver improved outcomes for users and carers
• Build in to the implementation of the preferred option an evaluation that tests out the validity of the option appraisal analysis

Source: Joint Reviews

Develop a contracting strategy

• Relate your contracting strategies to the medium-term commissioning objectives for each area of service
• Spell out medium term purchasing intentions to providers to assist their business planning (see Lincolnshire Commissioning Strategy)
• Determine the mix of providers and contracts appropriate to each market to secure supply, allow a measure of choice, promote continuing improvement and contain costs (see Exhibit 12 below)
• Maintain a measure of competition between providers within all markets and allow scope for new entrants, wherever possible
• Provide incentives and/or safeguards for providers to move into under-provided areas or new or innovative services for example front-loaded contracts, equipment grants, guarantees of funding to specified levels

• Aim to shift the focus of contracting from the specification of service inputs to the outcomes to be achieved, with incentives to achieve better and/or quicker outcomes for example applying the re-ablement ethos to homecare and day care
• Adapt the tendering process to the stage of development of each service area, for example the less developed, the more flexible the process (see Leicestershire residential childcare commissioning strategy)
• Allow for flexing of fees to adapt to changing levels of user need to avoid undue demands on care management staff authorising variations of contracts
• Adjust contract conditions to provider requirements, for example frequency of payment to small providers to maintain cash flow
• Avoid creating perverse incentives through different contracting requirements, for example spot contracting for domiciliary care requiring three quotes every time being more difficult than a standard call-off contract for residential care
• Seek to agree pricing and contracting strategies, including standardised contracts, with other authorities purchasing in the same market

Source: INLOGOV course on Commissioning

Relationships with providers

• Seek to develop relationships of mutual trust with providers as adversarial relations are normally time-consuming and non-productive
• Promote an open two-way sharing of information with providers that is not confined to the negotiation of fee levels but embraces shared problem solving, risk management and forward planning
• Encourage providers to be represented in formal dialogues through affiliation to their local associations but keep open channels of communication with non-affiliated providers through newsletters/circulars etc
• Expand collaborative support systems, such as shared training and workforce development
• Be alert to the need to support smaller providers in developing their contracting skills, so as to be able to compete with larger providers
• Be clear and explicit about the role of any in-house provision, whether it is to complement and/or compete with the independent sector
• Consider developing internal Service Level Agreements or internal trading mechanisms with in-house providers to make the accountability even-handed with independent sector providers and to make the financial implications more explicit within the contracting process

Transaction costs

Transaction costs can be minimised dependent of the level of mutual trust between the purchaser and the provider (Exhibit 14).

Source: INLOGOV course on Commissioning

• Ensure that all the transaction costs of all the different contracting arrangements are included in budgetary accounting and comparisons
• Be mindful that the more providers you have the more your transaction costs will be, so balance this consideration against other factors such as choice
• Exploit opportunities to drive down transactions costs for example electronic invoicing

Set and monitor standards of service delivery

• Complement national performance measures with selective local indicators, related to the priorities of the various commissioning strategies
• Concentrate quality assurance on a core set of standards agreed with all stakeholders, consulting with users and carers on the quality measures most meaningful to them, for example, continuity of care
• Be precise about what standards of service are being purchased over and above the basic registration standards
• Make the specified standards well known to all service users and their carers
• Shift the focus of monitoring increasingly on to the achievement of individualised outcomes for users, set against the overall cost of the care plan (Exhibit 15)
• Ensure that measurable social care outcomes are being delivered within integrated services with other agencies, relative to the level of investment

Monitoring

• Collate intelligence from contract monitoring and care plan reviews with national inspection reports and user complaints and compliments (see Bexley Older People's Commissioning Strategy and Leicestershire's residential child care commissioning strategy)
• Relate the investment in monitoring to the scale of investment in the service and to the range of other safeguards in place
• Continue to refine the accuracy of the unit-costing of services and other performance management data
• Focus contract monitoring on the providers' own quality assurance systems, backed up by purposefully random sampling of service provision

Source: Joint Reviews

Follow-up

• Agree protocols on intervention with under-performing providers (see Leicestershire's residential child care commissioning strategy)
• Follow through on enforcement action
• Publicise performance against standards to all stakeholders, especially users and carers
• Run regular audits to validate the monitoring arrangements

GOOD PRACTICE TIPS

Monitor what matters Ensure that there is sufficient organisational capacity to develop and monitor service standards and sufficient operational staff capacity to review all care plans, since this is a continuing area of under-investment Concentrate monitoring on the standards of service contractually required above registration standards, so as not to duplicate the work of the national inspectorates Do not over burden providers with too many targets and standards since this encourages a mechanistic approach to quality of care and overwhelms the monitoring capacity Do not rely on satisfaction surveys alone as a measure of quality; never under estimate the reluctance of dependent service users to make any complaint

Revise commissioning and contracting strategies

• Develop a rolling programme of drafting three-year commissioning strategies that are subject to annual review and develop a similar programme for most contracts, although some may be on a shorter timescale.
• Consult with all stakeholders on the proposed changes to the commissioning and contracting strategies
• Have a formal process for feeding performance monitoring outcomes into the revision of commissioning and contracting strategies
• Update predictive planning models and risk assessments in the light of performance management intelligence
• Re-align strategies with any changes in strategic priorities and/or amendments to medium-term resource assumptions or predictions of demand
• Safeguard medium-to-long term planned shifts in resources, wherever possible

GOOD PRACTICE TIPS

Revising strategies Do not set unrealistically short timescales to contracts and service level agreements that give insufficient security to providers and over-stretch the contracting capacity of the authority in terms of renewals Resist opportunistic funding opportunities that do not fit with strategic objectives (over-stretching the managerial capacity) Reinforce the right incentives in the system, rewarding and re-investing in providers who have delivered the desired outcomes and being seen to take action in relation to under-performing providers Aim to decommissioning some services each year to be able to recycle some base budget monies