Draft Outline

National Procurement Strategy for Health and Social Care

15/12/2014

Please review and send comments/amendments to:

Michelle Murray, Adviser, Finding Common Purpose

Winterbourne View Joint Improvement Programme

Local Government Association, Smith Square, London, SW1P 3HZ

, 0207 664 3320

I Rationale and Vision

The chief outcomes from this work will be the development of a new National Procurement Strategy for Health and Social care services with a set of model Standing Order (Outcome Based) for use local authorities which will be person centred. This will reflect the intent of good commissioning guidance and the Care Act 2014, which is also person centred. The Strategy and model Standing Orders will give commissioners and procurement officers tools and examples which are suitable for person centred commissioning. There will also be a guide for councillors, providers and people who use care to accompany the Strategy.

The Select Committee on Communities and Local Government highlight the need for the LGA to support local authorities to do procurement better and to dispel the myths around EU procurement.

Procurement is concerned with how the money is spent in a local authority. A procurement culture has grown over time which reflects impartial rules and regulations which focuses on delivering a fair process, saving money, and avoiding litigation. In other areas of local authority procurement (ie Construction, Energy, and ICT), the focus is on commercial processes and monitoring for efficient contract management and control; as well as on bulk buying, social value considerations, joining with other buyers to get better deals and the corporatisation of procedures. The focus is generally making savings, with corporate procurement focussed on the social and economic wellbeing of the local authority.

Good Commissioning for people with social and health needs have additional imperatives as priorities. Given the risks inherent in not adequately and proactively meeting people’s needs (ie ad hoc provision of care, higher incidence of safeguarding incidents, hospitalisation and expensive reactive responses to breakdown in care), commissioners must focus how they spend money to appropriately meet needs. The how is outlined in the Commissioning for Better Outcomes. If Commissioners are to be able to appropriately fulfil their duty of care to their residents, they need procurement officials to have the same priorities as they do.

Duties within the Care Act 2014 include the duty for the local authority to meet individual needs where there is provider failure. The Care Act states that when there is service interruption or closure, there is a balance to be struck between moving people to another service, or working with the provider at risk to prevent business failure. Local procurement strategies must make contingency plans which are flexible enough for commissioners to respond appropriately in each case.

In order for local authorities to integrate procurement successfully into a commissioning cycle that produces the results required, the distinctiveness of social care procurement must be recognised.

  • In social care procurement, it must be recognised that the procurement imperatives must align with that of the commissioners’, and that procurement officers are able to offer a range of solutions which are person centred and deliver timely and adequate support to individuals.
  • In social care procurement, it is also not the ‘label’ that the official carries, whether ‘commissioner’, ‘strategic commissioner’, or ‘procurement manager’ which matters, it is the function that they carry out. This strategy is for anyone responsible for the buying of social care and support within a local authority.
  • In social care procurement, the quality of the communication between stakeholders is paramount to getting the right outcomes for people who use services.
  • In social care, because the majority of care is delivered by independent providers, procurement approaches must demonstrate the importance of creating and maintaining a diverse and appropriate market so that commissioners and individuals who have a personal budget or personal health budget have a choice of quality services to buy.
  • In social care, because of the close connection between health and social needs, procurement strategies must be developed in conjunction with local Clinical Commissioning Groups (CCGs) and Specialised Commissioning Groups (SCGs) so that the service provided to people is seamless, so that providers in a local area have an accurate picture of how many people need what kind of service, and so that funding flows are agreed at the outset and are not a factor that delays the rehabilitation of people into their community.
  • In social care, because of the necessity of looking at accommodation alongside of care delivery, procurement strategies must have regard to the housing needs and solutions for people with assessed needs in their borough. Procurement officials must have knowledge of housing benefits and funding and be able to provide solutions to commissioners trying to find housing for vulnerable people.
  • In social care, procurement must be involved during most, if not all, of the commissioning cycle, so that options about how money can be spent on health and care are understood, and market analysis is available at the outset of strategic commissioning.

2. How national and local organisations will support delivery of the Strategy

This Strategy will aim to integrate the duties within the Care Act and will look to the Department of Health for support in dissemination. This Strategy is also aligned with Commissioning for Better Outcomes, a joint ADASS and LGA project, and will look to those organisations supporting the recommendations within this Strategy. This Strategy has incorporated the concerns of providers through Care England and the Care Providers Alliance, and it is anticipated that social care and health providers will support the recommendations herein. This Strategy has regard to the Quality of Life Standards and audits included their overall message of people using services co-producing the services they use into the recommendations.

On a day-to-day basis the National Advisory Group (NAG) owns the Strategy and is responsible for overseeing its implementation including the preparation of periodic update reports.

NAG will work with the Society of Procurement Officers in Local Government (SOPO) to promote the approaches and good practice set out in the strategy and will facilitate peer help and support where appropriate.

The LGA has developed a microsite for the strategy and publication of good practice resources to support implementation. It is hoped that the LGA will also tailor existing programmes to align with the commitments in the strategy (including the Leadership Academy, Productivity Experts and Peer Challenge).

Chapters

Chapter One :Leadership

In the field of social care, local authorities need to speak clearly with a single cohesive voice to ensure that central government policy takes into account the needs and differences of local government. Leadership is also needed to signal commitment from the top to recognise the strategic importance of procurement throughout the commissioning cycle.

In the Bolder, Braver and Better: Why we need local deals to save public services report by the Service Transformation Challenge Panel of November 2014; the role of collaborative leadership is the critical behaviour factor in successful transformation. Without it driving reforms across local and national organisation simply does not work. Collaborative leadership behaviour empowers services users, local communities and other sectors. In the specific area of procurement, strong leadership is needed to build commissioning relationships across stakeholders, including health, providers and people who use services. It is for strong leaders to emphasise the importance of putting the user experience of the social and health care systems first, and to take responsibility for service quality and outcomes.

In the report, Finding Common Purpose, the call for strong leadership came from providers. They felt that Directors of adult services should give effective, top-level leadership to the procurement process and find ways of fostering better market relationships. This document will aim to support procurement to inform Directors in what is possible and permissible in procuring in a person-centred way, so that Directors can provide effective leadership in shaping care delivery.

All the recommendations within this Strategy, therefore, must be owned by local leaders, such as Directors of Social Services and Corporate leads, to give clear strategic commitment to innovating procurement practices.

Outcomes

  • It is clear to local leaders that the Strategy makes some departures from other category spends and that its procurement processes could be modified accordingly.
  • Local leaders will collaborate with other stakeholders to arrive at services which are procured across different funding streams for common outcomes based on the needs of individuals.
  • Local leaders will look at procurement expertise as transformational, rather than transactional, and will encourage procurement input and collaboration in all areas of the commissioning cycle.
  • Local Leaders will actively seek to meet their duties under the Care Act in relation to prevention, integration, cooperation with stakeholders, development of the independent market and promoting wellbeing; through the intelligent and innovative procuring of services.

Recommendations

  • Consultation and engagement with stakeholders, providers, health, housing and other agencies should be standard practice.
  • Local authorities should consider alternative funding mechanisms where appropriate.
  • Local authorities should champion the value of sharing information and developing joint analysis.

Chapter Two :Value Based Procurement

Councils are dealing with significant financial pressures resulting from reductions in government funding and rising demand. This means using spending power wisely and strategically and setting targets for procurement and contract management by the effective use of category management in key areas of spend. Energy, ICT and Construction have been covered by the National Procurement Strategy and have their own Strategies under development. This Strategy will cover a fourth major spend for local authorities – social care. It is forecasted that some authorities will be spending 40% of their available resources in social care by 2020. This area needs analysis to provide a broad understanding of the local government supply market. The Care Act states that in the field of social care, local authorities must facilitate markets to offer continuously improving, high quality, appropriate and innovative services.

Outcomes

  • Category management helps councils to make financial and social savings by maximising value from areas of spend
  • Councils will achieve value through developing and using appropriate specifications and processes developed for outcomes based commissioning.

Recommendations

  • Use model Standing Order for local government that is focused on the values of outcome based commissioning
  • Look to examples of best practice in procuring in social and health services from across the country in order to prevent ‘re-inventing the wheel’.

Chapter Three :Partnering and collaboration

This strategy is for health and social care and considers the importance of local areas partnering with local CCGs and SCGs which provide services to their residents. Shared procurement services and posts should allow for a more integrated service across social and health care. The Care Act states that local authority commissioners must cooperate with each of its relevant partners, such as NHS bodies. They must promote integration between care provision, health and health related services with the aim of joining up services.

Collaboration is also required with independent providers and people who use services. Treating these stakeholders as equals will promote a procurement process which is grounded in reality and produce results which are fit for purpose.

Outcomes

  • There will be effective links health services.
  • There will be effective links with local providers.
  • There will be effective links with local service user groups.
  • Commissioners and procurement teams will understand people’s needs and abilities across health and social care.
  • Local authorities will enhance quality of services through effective collaboration or via a shared service on common services without compromising the need for social value and providing opportunities for local businesses.
  • There will be shared objectives for health and social care incentivise keeping people well and safe in the community.

Recommendations

  • Establish a Joint Strategic Commissioning Board to include as equal partners local CCGs and SCGs where local authority residents are placed.
  • Make effective use of Market Positioning Statements and Joint Strategic Needs Assessment to bridge the gap between information, analysis of that information and procurement strategies for local health and social care.
  • Understand and use integrated social and health care delivery systems (Better Care Fund, s75 Agreements, bespoke agreements)
  • Abide by the Provider Protocol, appended, to facilitate healthy relationships between local authorities and the independent market.
  • Integrate the Quality of Life Standards and Audit across all cohorts of people using services.

Chapter Four :A Person Centred approach to contract management.

There will be more flexibility in the procurement process when the new EU Directive on Public Contracts is transposed in the next two years; however even under existing rules, the full implementation of the Public Contract Regulations 2006 can be avoided if procurement for services was done on a person by person basis – such as through personal budgets and personal health budgets. This person centred approach to contract management would echo the person centred commissioning which has beenthe default position for social care for some time now.

There are many examples of procurement processes focusing on the outcomes for people, some of which will be highlighted in the Strategy, and published on the LGA Productivity Team’s website.

Outcomes

  • Local authorities operate simple streamlined procurement processes that are focussed on outcomes for people using services.
  • All procurements for social care services are carried out in the spirit as well as to the letter of the new light touch regime.
  • Procurement processes and contracts measure outcomes rather than simply meeting needs.
  • The individual service user (and/or their carers) are involved in the procurement process as far as possible, in terms of the design of the service and in their feedback on the service provided.
  • In the procurement process, consultation and engagement with stakeholders, people who use services, providers, health, housing and other agencies will be standard practice.
  • Procurement take into account longer term commissioning strategies and other sources available to the authority, such as MPS and JSNAs

Recommendations

  • The specific needs of different categories of users, including in particular disadvantaged and vulnerable groups, should inform the specifications of contracts.
  • The involvement and empowerment of users should inform the specifications of contracts.
  • When deciding what the most economically advantageous tenders are, the authority will take into account the quality and sustainability of the offer, and its price/quality ratio should reflect the outcomes required.
  • More use should be made of PIN notices to involve the independent market’s suggestions of what can be done to achieve outcomes.
  • When awarding contracts or places on frameworks, the authority should use award criteria which are properly linked to the subject matter of the contract.

Chapter Five :Valuing Procurement.

Our section in ‘Myth Busting’ will demonstrate that far from being the ‘no’ people in the back room, procurement officers have in fact a body of knowledge and expertise which is necessary for commissioners to effectively deliver on the Care Act.

Procurement should be seen as transformational, rather than transactional, and should use its negotiation and problem solving skills to come up with innovative approaches. Procurement should be present throughout the strategic commissioning cycle. By developing a person-centred approach to social care procurement, resulting services will be more cost effective by being right the first time and fit for purpose. The move away from ‘warehousing’ people in unsuitable hospital or residential care into appropriate care in the community will be more cost effective and in line with the person centred aim of the Care Act.

Outcomes

  • Procurement functions will be integral to the whole commissioning cycle.
  • Procurement officers will understand the imperatives of the Care Act and be able to reflect that in product and process.
  • Procurement functions and expertise will be recognised and supported by local leaders.

Recommendations