______
REPORT OF
Assistant Mayor’s Briefing for Health and Wellbeing
______
TO
Health and Wellbeing Scrutiny Committee
On
5 March 2014
______
TITLE: Public Health Procurement Framework Proposal
______
RECOMMENDATIONS:
For approval by the Assistant Mayor for Health and Wellbeing and Adult Services and Services for Older People on 27th November and decision by the Procurement Board on 24th January 2014
To review and approve the development of a public health procurement framework
______
EXECUTIVE SUMMARY:
This paper proposesthe development of a Public Health Procurement Framework to enable the re-commissioning of public health services in line with council policy and in the required timescale.
It outlines the process for procurement of public health services via a framework and describes the principles of using such a framework to commission public health services.
This paper provides an update on the information brought to theAssistant Mayor and City Mayor briefingsand to the City Mayor in March 2013 as part of the contract transition and associated waivers.
______
BACKGROUND DOCUMENTS:Healthy Lives, Healthy People: Our Strategy for Public Health in England (2010), Healthy Lives, Healthy People: Transparency in Outcomes, proposals for a public health outcomes framework (2010) Healthy Lives, Healthy People: Consultation on the funding and commissioning routes for public health (2010) Healthy Lives, Healthy People: Update and Way Forward (2011); Public Health in Local Government Commissioning responsibilities (2012)
Cabinet: Public Health Transition 8 March 2011, LA Public Health Grants Nov 2011
Leaders Briefing: Public Health Spend Briefing, Feb 2012, April 2012
Lead Member Adult, Health and Social Care: Public Health Finance Allocation, 31 Oct 2011.
Assistant Mayor Health and Wellbeing: A response to the draft funding formula for the public health allocation, 16 July 2012; Release of LA PH Grants Baseline Allocation, 16 July 2012; Public Health roles and responsibilities, 28 Sep 2012; Hundreds Health Salford MOU,17 Aug 2012; Public Health Procurement Framework Proposal 27th November 2013
City Issues: Public Health Transition: Managing the public health allocation, 4th March 2013
______
KEY DECISION:Yes
______
KEY COUNCIL POLICIES: N/A
______
EQUALITY IMPACT ASSESSMENT AND IMPLICATIONS: -
______
ASSESSMENT OF RISK:
______
SOURCE OF FUNDING: Funding will be within the public health ring fenced budget.
______
PROCUREMENT IMPLICATIONS: supplied by Mark Griffiths, Procurement Manager
The Procurement team has been working closely with Public Health Commissioners to consider the development of a framework that will allow an efficient and effective method of engaging with the market to procure services in accordance with the Council’s contractual standing orders. It is recognised that a framework will offer certain key benefits, including the reduction in the timescales for awarding contracts in comparison to the requirements of a full procurement process, a more efficient use of procurement and commissioning resources across the organisation and the potential for more robust relationships with providers.
There is a fundamental question of whether the opportunity to access such a framework could be made available to other Great Manchester authorities which would ultimately support the collaborative commissioning of public health services across GM. Further consideration of the options available and how a framework could be constructed and managed is required including the effect on in-house provision such as the Health Improvement Services. Further proposals will be brought back in a later report for consideration by the Assistant Mayor, Health and Wellbeing and the Procurement Board.
EU Procurement rules are currently under review and guidance indicates that this will include changes to the procedures for the procurement of Part B services, which may impact on the way Public Health Service are procured in the future. The new procedures are expected to be in place by June 2014.
LEGAL IMPLICATIONS: Tony Hatton, Principal Solicitor, tel. 219 6323
The framework agreement allows an authority (or group of authorities) to put in place, through a competitive process, an arrangement whereby suppliers can be selected to supply a defined scope of services under an agreed set of terms andconditions. The terms and conditions established under the framework govern thecontracts let under the framework although each contract will inevitably have somedifferences to reflect the agreement struck between the parties to the contract e.g.actual detail of what is being supplied, in what quantities and for how long.
The framework arrangement enables authorities who are party to the agreement tocall-off the specified services, against the agreed set of terms etc. should they wishto do so within the 4 year lifespan of the framework. Being party to the agreementdoes not place any obligation on an authority to use the framework but provides them with the opportunity to do so.
At the end of this 4 year period, the framework must be dissolved and suppliers forgoods or services re-competed for. If necessary a new framework can then beestablished. This ensures that value for money can be periodically tested and opencompetition maintained.
The drawdown procedure for framework agreements can be either via direct allocation or mini competition; between the providers that are capable of performing the proposed call-off contract
The period of the individual contracts established under the framework can be aslong or as short as the authority requires (subject to standard proportionalityrequirements, good practice and the requisite need to demonstrate best value etc.).
As for volumes – whilst not committed to providing specific volumes, authoritiesshould consider the likely response and pricing they can reasonably expect from theprovider market without determining such.
The Council (or any party) cannot contract with itself, therefore the proposed in-house provisions will either be excluded (as a lot) on the framework or another possibility for that service is the move to mutual or social enterprise status, as referred to in section 4 of the report.
Other options are not yet referred to in this report but it is noted that a further report outlining other proposals will be put to Assistant Mayor at a later date, predicted in December this year.
FINANCIAL IMPLICATIONS: Supplied by: Dianne Blamire, Principal Group Accountant – Community, Health and Social Care
The Public Health budget is funded by a ring fenced grant of £17.075M in 2013/14 rising to £18.776M in 2014/15. A significant proportion of this grant (£14.5m in 2013/14) is spent on commissioning services both internally within the Council and externally from a range of providers.
The benefits of a procurement framework approach are set out in this report and specific financial considerations include reduced transactional costs, streamlining procurement processes and efficiencies to be achieved from combining spend across public sector organisations.
As stated in the procurement comments above, the implications for the in house provider, the Health Improvement Service will need to be considered as the framework is developed and any financial risk clearly identified and reported.
.
OTHER DIRECTORATES CONSULTED: work is underway with other City Council commissioners for adults, children and the DAAT.
______
CONTACT OFFICER:David HerneTEL. NO.0161 793 3542
______
WARD(S) TO WHICH REPORT RELATE(S): All
______
[i] Department of Health (2011)Healthy Lives Healthy People
[ii] Department of Health (2011)Healthy Lives Healthy People
- Introduction
This paper outlines the proposal for procurement of public health services via a frameworkagreement and describes the advantages and key principles of using such a framework.
This paper seeks approval to proceed with the development of the framework.
- Background
Public health contracts to the value of £14.5mtransferred to Salford City Council on the 1st April 2013, as part of the transition of public health responsibilities under the Health and social care act.
To support the public health transition, all contracts were granted a waiver for 18 months. This means that currently all public health contracts are due to conclude on 30th September 2014. There are currently 47 contracts covering 108 services. Out of these:
- There are some services may need to be maintained in their current arrangements – e.g. school nursing and young people’s health provisions which have links to Health Visiting services which are due to transition back to local authorities from NHS England in 2015.
- A small number are being risk reviewed where there is a degree of financial, clinical or reputationalrisk and these are managed through the risk register.
- Drug and alcohol services covering 11 of the 47 contractsare excluded from the proposals in this paper as they are currently under re-procurement process for 2014.
With the exception of the drug and alcohol services, there are 80services which sit beneath the 36 public health contracts to the value of £10.2m which will reach the end of their tenure in September 2014 and therefore must be re-procured or granted an extension.
The public health team is leading a review of the current deployment of the public health grant with a clear intention to re-position the grant to align more effectively with local priorities. This is a long term project that will be phased over time and may involve some commissioning of services across a larger footprint eg. Greater Manchester.
All re-procurement will be undertaken in compliance with City Council Standing Orders which will apply to all contracts when they terminate in Sept 2014.The current approach to managing the public health contracts in Salford is focusing on three key areas:
Maintaining delivery– to improve on the standards of public health performance that have already been achieved in Salford;
Preparing for the future– by building on the existing Salford systems and expertise that are in place and accelerating progress towards our local vision for public health in Salford which will support our future Health and Wellbeing Strategy;
The engagement of key stakeholders– in developing the plans for the future, to ensure that the changes are handled effectively, building confidence in the NHS, the local authority and third sector partners;
- Proposed way forward
The complex contracting situation suggests that in order to re-procure public health services in a timely and safe manner a Public Health procurement framework be developed.A framework for procurement for family povertywas successfully implemented earlier this year. The public health framework will supplement this.
Procuring a framework agreement has the advantage of removing the need for conducting a full procurement process for individual contracts. It is essentially an agreement where one or more suppliers are selected to provide a particular set of goods or services following standard terms and conditions.
Framework agreements can be procured to cover multiple suppliers or a single supplier. The framework can also be divided into Lots for particular requirements (e.g. specific provision of areas such as obesity or sexual health).
3.1 Advantages of a public health procurement framework
A framework agreement will enable:
Reduced transaction costs
Continuous improvement within long-term relationships with service providers
Better value including greater social value by stimulating the local market to develop their skills around public health
Speed up the procurement process
Achieve efficiencies by combining spend from across public sector organisations.
A key feature of a procurement framework is that it will enable the introduction of new and robust performance management of the contractors. This will allow us to monitor and report key information. This information will include:
- benchmarking with similar projects through the life of the framework to ensure value for money is achieved.
- social and community value
- demonstration of continuous improvement
This will enable Public Health to develop themarket and better service provision for the residents of Salford.
3.2 Enhanced engagement with the market
The Public Health framework will be set up for a 2 year period with an option to extend for one plus one years. The use of a framework will mean that procurement can be scheduled to align with the re-profiling of the public health spend and could also allow other local authorities across GM to participate in its development and/or use.
There will be a comprehensive approach taken to engagement with local providers. Pending approval details of the frameworkwill be discussed at a provider development event which will be scheduled early 2014.
The prioritisation work will be progressed during January/February working with all commissioners for public health budgets. This will include existing City Council commissioners and procurement staff using a prioritisation process to prepare options for each framework scenario which will be presented to Assistant Mayors in February.
- Implications for SCC
A waiver was granted for all public health contracts in March 2013 to maintain stability during transition however, although large scale redesign of a section of the public health grant is underway (the Drug and Alcohol redesign totalling £4.5m), to undertake work of this scale across all contracts will be very challenging against the timeline imposed by the initial waiver.
A procurement framework will allow stability within the public health, procurement and legal team and will allow a scheduled approach to contract conclusion.
There is interest across Greater Manchester in this approach and the framework could be opened to other local authorities thus promoting Salford City Council’s reputation, there may also be an opportunity for income generation in the future.
Legal advice is that procurement rules will prevent city council providers applying for a place on the framework.
This particularly presents a challenge for the Health Improvement Service who are currently one of the largest providers’ of wellbeing services. However this might be mitigated by progressing the move to mutual or social enterprise status.
- Next Steps
The next steps are to:
Approve the development of the Framework.
Progress procurement for lower value contracts prior to the development of the framework i.e. move on with the possible quick wins. These will be identified and brought back to a further briefing in February.
Establish a programme board to develop the lots and provide oversight of the procurement processes. This will report on a bi-monthly basis to Assistant Mayor, and to procurement board where key decisions are required.
Proposed timescales are outlined below in appendix 1:
- Recommendations
To approve the development of a public health procurement framework
Appendix 1
Proposed Timescales
OutcomeEstablishing Corporate Procurement
Action / Timescale / Update
Consult on the Procurement Framework and seek approval for progress and waiver / October- November 2013 / AMB health and Wellbeing October
Integrated
Commissioning
Board March
External Authorities
Joint AMB November 2013
Approval Received for the process
Establish programme board / January 2014 / Ongoing
Develop, consult and review the procurement portfolio / October 2013 / Ongoing work plan
Review the contracts register / October 2013 / complete
Identify quick wins and establish principles for procurement framework / October –January 2014 / Ongoing
Identify Contracts requiring a waiver due to large scale redesign proposals / January –February 2014 / Under development
Identify key performance indicators and risk management information indicators to obtain data and to assist future procurement and service requirements / October 2013 onwards / Under development
Identify tenders pilot/quick win contracts and review dates and establish procurement principles / October 2013 / As part of the contracts register
Identify new procurements in line with the corporate strategy / September 2013 / Development in line with corporate strategy and commissioning areas
Undertake initial Spend Analysis work – link in with Finance / November 2013 –January 2014
Undertake analysis and set up necessary guidelines for the procurement relating to existing and future pilot contracts / January 2014-March 2014
Ensure financial arrangements are explicit in contract documents for payments, leasing, variations, change control, increase costs, extensions etc. / January 2014-March 2014 / Included in all new contractual arrangements. Ongoing process to develop throughout
All major contracts must have customer satisfaction / consultation processes included – management by the commissioners and providers
Develop risk reporting mechanisms / January 2014-March 2014 / In progress – All current specifications would be reviewed and revised to ensure included
Set up planning process to ensure time for service development, review and market understanding and stimulation / January 2014-March 2014 / As part of the contracts register
Establish clear framework specifications for the framework / January 2014-March 2014
Commence provider engagement / February 2014
Serve notice on existing contracts with a staggered approach / March 2013 onwards
Operate framework / September 2014 onwards
Procure using the framework / September 2014 onwards
1 | Page