Efficient/effective commissioning

The impact of local authority procurement on voluntary and independent children’s services providers

A joint survey by three providers' organisations in 2012 highlighted faults in local authority procurement of their services. Procedures should be streamlined to allow providers to place children's needs first rather than red tape which needlessly diverts staff time from child care. They urge a national procurement framework and ask the Government to oppose new EU rules, which will leave placements for vulnerable children and young people open to tendering.

Background

The Nationwide Association of Fostering Providers (NAFP), Independent Children’s Home Association (ICHA) and the National Association of Independent Schools and Non-Maintained Special Schools (NASS) represent over 400 providers of children’s services, meeting the needs of over 17,500 children. Fostering, special education and children’s residential child care are distinct services and our organisations have received reports from members on the increasing time being spent on procurement-related activity. This prompted a joint on-line survey of members' experiences of local authority procurement.

Survey

The March 2012 survey comprised 18 open and closed questions. The 47 responses were relatively evenly split between fostering providers, children's homes providers and special schools. The 47 organisations are collectively responsible for over 4,000 placements for children and young people in England and Wales. Over half work with 22 or more local authorities and over three-quarters work with more than 10.

Headline findings from survey

  • Respondents highlighted several factors which hinder providers in procurement activity. A key factor was poor quality or no information provided by local authorities. Providers also noted that framework agreements were not honoured by the local authority
  • Procurement activity takes up an increasing amount of providers’ time. This usually equates to a member of staff working almost full time on procurement. Whilst approximately 40% of respondents believe that this means increasing placements, there are many concerns about the impact on providers.
  • Procurement activity is too focused on cost rather than the needs of the child and is too bureaucratic. Key personnel are frequently diverted from deploying their accumulated knowledge and experience to completing imposed non-child directed tasks. This has significant financial costs in a climate with little scope for increasing fees and a commitment to high quality children’s services.
  • The Government should create a national procurement framework for all local authorities and reduce paperwork for providers which work with multiple authorities.
  • European Union Procurement Rules increasingly drive the purchasing of children's services from the voluntary and private sectors. Respondents ask the Government to oppose plans to remove the category of Part B services, which will leave placements for vulnerable children and young people open to tendering, even with the proposed threshold raise from 200,000-500,000 Euros.

Findings

Respondents were asked to note factors which help or hinder providers in procurement and specifically about their experiences of referrals to their service. Respondents more commonly recorded experiences which hinder rather than help their ability to provide a high quality service.

Over half of respondents identified some positive experiences of procurement, which included:

  • Feeling as if an open and honest relationship had been established between provider and placing authority
  • Meeting local authorities more regularly
  • Satisfaction in being able to provide a service which the local authority had been unable to provide
  • Good communication between both parties – particularly concerning the needs of the child
  • Access to high quality information about the needs of the child and the service required

However, others gave a wide range of negative experiences of procurement. The key dissatisfactions were:

  • Lack of face-to-face contact with commissioners
  • Lack of information or poor quality information provided by the local authority
  • Receiving every single referral from the local authority – even if clearly inappropriate to the service
  • Lack of feedback from local authorities about the outcomes of tenders
  • Providers signing up to framework agreements which are not honoured by the local authority - for example, on fees

European Union procurement rules

Over the past four years, recession and reduced local authority funding have brought cost and price into sharper focus. Additionally, as local authorities become commissioners rather than direct providers of services, there has been an increased focus on commissioning and procurement activity. Our survey found that European Union Procurement Rules increasingly drive the purchasing of children's services from the voluntary and private sectors.

These indicate that public bodies purchasing services whose overall value exceeds 200,000 Euros should go to open tender. However, education and social care services are listed as Part B services and authorities are not obliged to follow the full tendering process for such contracts. Current plans to revise the EU Procurement rules include removing the category of Part B services and raising the threshold to 500,000 Euros.

Recommendations based on the survey

For government

  • The findings suggest that the Government should create a national procurement framework for all local authorities. This would reduce paperwork for providers who work with multiple authorities. Our organisation would be delighted to work with the Government to drive this vision.

The Government oppose reforms to European Union Procurement Rules including plans to remove the category of Part B services, which will leave placements for vulnerable children and young people open to the tendering process. Many placements for children with high needs will exceed the proposed new threshold of 500,000 Euros and will fall under full EU Procurement rules.

For local authorities

Respondents were asked how local authorities could simplify the procurement process for providers and make it more effective in meeting the needs of children and young people. The responses are:

  • Be open and transparent about the process and assessment criteria.
  • Build and maintain relationships with providers – this enables us to better understand your needs and ensure that we meet the needs of the children and young people that you place with us.
  • Ensure that local authority procurement officers are trained in understanding the needs of children and young people and are supported by children’s professionals.
  • Try to develop rather than control the market by focusing on issues such as innovation and price flexibility rather than price fixing.
  • Simplify and reduce the amount of requested information.
  • Develop two tier processes with minimal information provided at stage 1. Providers which meet the selection criteria can then be asked for more detail at stage 2. This would ensure that unsuccessful providers need not invest the same amount as time as in a single stage process.
  • Create more opportunities to meet providers regularly. This helps develop trusting relationships. Involve your in-house providers in these events to create a “level playing field”.

We would like to work with governments and local government associations to promote best practice guidance to support local authorities make the procurement process easier for providers.

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