This section looks at two types of partnership agreement. The first is the agreement which governs how partners will work together to provide services. This is followed by information on developing contracts for purchasing services commissioned by a Partnership.
It is good practice to develop a partnership agreement. If the agreement relates to an executive decision-taking partnership (see Objectives) then it is likely to be quite a detailed document, and it will be necessary to involve the council's solicitors to work with those representing the other agencies in the partnership. Although you may need a legal contract to protect the authority's interests you could still develop a more informal document which outlines agreements about the day-to-day working of the partnership.
The Employers Organisation for Local Government's web site on Smarter Partnerships contains resources for making partnerships more effective. It includes an overall health check of the partnership and tools and techniques for assessing the partnership in more depth.
More information can be found here.
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Developing a partnership agreement Aims and Objectives:
Strategy and Activities:
Membership and Decision Making:
Management and Operation of the Partnership:
Resources:
Conflict Avoidance/Dispute Resolution:
Information: What information shall we share? |
Partnership arrangement using Health Act flexibilities
If you are taking advantage of Health Act flexibilities there is specific guidance on the Health Act Section 31 Partnership Arrangements and a checklist for using Health Act flexibilities. These can be found here.
Examples of Care Trust partnership agreements can be found here.
Procurement process
This section considers partnership issues relating to the procurement of services. More information on purchasing arrangements can be found in the Commissioning module.
'Competitive Procurement' published by the Audit Commission provides information for local authorities on becoming more effective when procuring services. It emphasises the importance of local authorities having procurement strategies and identifies four stages in the procurement process (Exhibit 8).
| EXHIBIT 8 | The four stages of the procurement process |
Source: Audit Commission
At stage two the 'make or buy decision' takes place, for example, whether to deliver a service-in house or to look outside. There are five possible outcomes to this decision-making process:
- Full outsourcing
- In-house provision
- A mixed market
- Partnership
- Postponing the decision and undertaking a market test.
Councils need to be clear about the criteria they intend to use to make strategic decisions about which of these approaches they pursue.
One of the possible outcomes from the process may be to commission the service from an external body in the form of a 'partnership contract'. Deciding whether to commission services from external organisations (outsourcing) is particularly problematic when a partnership may also be a provider of services as well as a commissioner of services. In circumstances where the host organisations have relinquished their commissioning responsibilities to the partnership, it is important that, 'the host organisations' spell out their expectations as to the commissioning principles and criteria to be used in the partnership agreement.
The Audit Commission describe partnership in this context as "outsourcing but retaining a strong influence on how the product is delivered". Such an approach is also referred to as a 'relational contract', where there is more collaboration between the commissioner and service provider over how the service is both delivered and developed.
How contracts help
Whenever services are procured there is an obvious element of partnership. Even when services are very tightly specified there will be a dialogue between purchaser and provider.
"Without understanding and a willingness to co-operate it is unlikely that the quality of the service will ever be any better than the minimum required to comply with the contract."
Audit Commission
Developing a partnership contract strengthens this co-operation and formalises it by giving it a legal status. This will foster closer working relationships which in turn can promote good quality services and a focus on continuous improvement (Exhibit 2.89).
The diagram below summarises good practice in the relationship between those who purchase and provide services.
| EXHIBIT 9 | Good practice between purchasers and providers |
Features of partnership contracts
The service specification should spell out what is expected and the contribution being made by all parties. This is different to a standard contract which focuses on what the purchaser expects of the provider.
The partnership contract between Southampton Council and an independent sector provider for the provision of independent sector foster care services illustrates this. For further information see the Southampton partnership agreement Good Practice Example.
When would you use a partnership contract?
You might use a partnership contract under the following circumstances:
- When you are seeking to build up a long-term relationship between the commissioner and service provider
- For services which are complex and high cost and/or high risk
- For new services where you can learn together
- When you have been developing the market and supporting a local community group or voluntary agency to deliver services for the first time
- When an established provider has diversified to fill a gap in the market
- When the service requires a high level of investment by the service provider.