9 June 2011 | Andrew Forzani

Public sector purchasers should embrace the opportunity to co-design local services, says Andrew Forzani from Surrey County Council

Commissioning is a term that seems to be everywhere in the UK public sector right now – whether it’s the NHS reforms, local authorities responding to the funding squeeze, or central government talking about its “Big Society”. It is, however, more than just a buzzword and it has an impact on procurement.
Commissioning has been enjoying a higher profile since the change of government last year. For procurement professionals it could present a real opportunity – and it is one we have been successfully pursuing at Surrey County Council.

But first, what do I mean by ‘commissioning’? It has its roots in health and social care where the NHS World Class Commissioning programme, launched in 2007, aimed to deliver “better health and well-being for all, better care for all, and better value for all” by taking a strategic, long-term and evidence-based approach to commissioning services. Various definitions exist and include themes of making use of market intelligence, as well as specifying, securing and monitoring services to meet individual’s needs. At Surrey, commissioning is the process of analysing needs and opportunities, planning how to meet the needs of our residents and our objectives, undertaking activity to do what we planned, and reviewing this impact and outcomes of this in order to continuously improve.  

We have been keen to investigate how our category management approach can support colleagues in commissioning by engaging with them earlier, aligning needs analysis with market awareness, increasing our engagement with users and customers and achieving greater integration and joint ownership of outcomes. Not only has this supported the delivery of significant savings through successful joint working, it has also enabled us to increase our influence across the organisation.
This has in turn presented us with the exciting opportunity to connect to the big decisions that are facing the organisation in this challenging financial climate, and help to shape the solutions.

Joined-up working

By embracing the commissioning approach we have been involved in a number of key projects, including three major change programmes in the past year. Our highways maintenance commercial and delivery strategy has been completely redesigned, with procurement leading the project and undertaking regional benchmarking, technical reviews with the service to redesign the need and a complete overhaul of the commercial and pricing models. At a time when our roads have been underfunded, this has led to substantial savings of more than £6 million a year, which have been ploughed back into network improvements.

The approach we have taken with our major adult social care providers was also radically different from previous attempts. It was a cross-functional initiative that saw commissioning and procurement working together to deliver a clear and honest message to strategic suppliers. This resulted in a cashable saving of nearly £1 million in 2010/11, secured future efficiencies and established a strong working relationship between procurement and the adult social care directorate. 

Over the past year we have also worked with key suppliers to reshape contracts that provide services to young people in the county. This has delivered more than £540,000 in efficiencies from a contract of £4.5 million, with no detrimental impact on quality. As part of the transformation of our youth services we are on track to achieve a further 25 per cent saving by 2012 by working with commissioners to redesign the services and driving an ‘outcome’ rather than ‘output’-based tender.

We are not alone in our approach. Recently, commissioning has been linked to organisations in the public sector as part of the ‘make or buy’ decision. Recent examples include Suffolk County Council and Brighton & Hove City Council, which are expected to become more commissioning-led organisations. What I think they mean is that they will be delivering fewer services in-house as they look to make savings, and may increasingly use the private, charitable and voluntary sectors to help achieve this. Even the government’s “Big Society” has elements of best practice commissioning at its root, with local authorities encouraged to include residents in decision making, with a focus on co-design and delivery.

Opportunity, not threat

The buzz around commissioning could be seen as a threat to procurement, but we have found that its emergence has actually presented us with opportunities to spread our influence. These recent developments have prompted us to look beyond sourcing and market activity, and return to the critical first activity of defining the need with our customers. Our procurement teams are applying their insight further up the value chain to challenge and influence how services are being reshaped. I would argue that this approach could be regarded as “category management plus”, because it covers a broader remit. Furthermore, in the spirit of joint working, it has also opened up opportunities for us to look beyond our own authority and to help to influence the emerging public health changes by working increasingly closely with the Primary Care Trusts and newly forming GP consortia.

As the way in which the public sector delivers services continues to evolve, it is even more important for procurement professionals to be aware of central government thinking. Documents leaked to the press in early May about a meeting between Cabinet Office minister Francis Maude and the Confederation of British Industry apparently describe ministerial desire to use more charities, social enterprises and employee-owned “mutual” organisations rather than the private sector in the delivery of public services. As professionals in the sector we would be advised to read the Open Public Services white paper, which is due for publication next month, and consider its impact on our roles.

At a time when the public sector is facing increasing financial strain, procurement teams have the chance to shine by delivering real benefits to their organisations. This will be achieved by maximising the opportunity to use commercial insight at the beginning of the commissioning cycle, enabling the profession to have a greater influence over the shape and direction of the business
change, rather than coming in at the end to undertake a sourcing exercise. 

☛ Andrew Forzani is head of procurement and commissioning in the change and efficiency directorate at Surrey County Council