Future of Local Public Services

Author: eGov monitor - Sep 28, 2011

80% of councils are considering taking a greater strategic commissioning role in the delivery of local public services in the near future, in order to meet the challenges of unprecedented financial squeeze faced by English local authorities, according to a report published by Localis, in partnership with Essex County Council and Mears.

The “Commission Impossible?” report is based on a survey of over 100 council leaders and chief executives carried out by Localis. Traditionally councils have provided many of their services themselves, and although in recent years there has been a gradual move towards commissioning services from other organisations, recent government figures show that total non-external local government expenditure is approximately £65bn.

But this is set to rise as the trend towards new providers looks set to accelerate significantly – for every council that believes more services will be delivered in-house in the near future, there are 16 more that anticipate less in-house delivery, instead predicting a shift in provision to voluntary organisations (82%), public sector shared initiatives (81%), SMEs (75%) and large companies (68%).

In order to manage the process effectively, the report lays out a series of recommendation. They are:

•   Address siloed nature of public services - Central Government should offer continued support and resources for pooling budgets, data sharing across the public sector and giving councils greater financial flexibility to better reflect the long-term nature of investments in early intervention initiatives. Health and Wellbeing boards should also be given ‘teeth’ to enable effective partnership commissioning.
•   Focus on outcomes not processes - Central Government should promote national availability of benchmarking data on provider performance to enable commissioners to make informed decisions. Councils should be open minded about methods for achieving savings before moving to tender , e . g . new providers, local authority trading companies (LATCs), support for the Voluntary and Community Sector (VCS) or shared services.
•   Support a thriving market for all sectors - Central Government should support councils in trying to evidence social return. Councils should adopt various mechanisms to improve service design and procurement – including exploring innovative methods for supporting market and building capacity for VCS and SMEs before reaching procurement stages, and should look to utilise innovative funding models to revolutionise the way that services are delivered.
•   Redefine risk - Councils should work with partners to redefine risk, internally and externally, to ensure that money is spent on services which deliver the long term outcomes. They should amend SME risk categorisations so that small stable and profitable businesses that are high risk due to their size in relation to the contract value can still be awarded suitable contracts
•   Create smarter, more flexible contracts - Councils should capitalise more on opportunities to value test and re-negotiate their contracts.
•   Redefine the roles and responsibilities of councillors and officers - Councils should support elected members to take on a greater role as community advocates and actively encourage members to take up scrutiny roles. They should embrace the culture change towards becoming strategic commissioners through officer and member training.
•   Make commissioning distinct from procurement and outsourcing - Councils should move from transactional to transformational savings, and work collectively to promote a clear vision of what commissioning means, including how this is distinct from outsourcing
•   Work towards a new, more localist, understanding of value - Councils should continue to develop their own measures of local ‘value’, working together with other councils to compare and benchmark performance
•   Involve communities in the commissioning process - Councils should give greater focus to how communities and providers can be involved in the commissioning process and priority setting, and should encourage and enable residents to share information and intelligence on their experiences of services, using the feedback of others to inform choices.

The report has received broad support from all three main political parties, as well as councils and the private and voluntary sectors:

“By commissioning more effectively and collectively not only will councils benefit from greater efficiencies that will allow savings to be made in a difficult financial climate, but working with local people and giving them greater involvement and responsibility over the way that their money is being spent will bring together service providers and service users in partnership to drive continual improvemen,” former Communities Secretary, Hazel Blears said. ”The report’s conclusions are relevant for central government and councils of all political persuasions, and will undoubtedly become increasingly pertinent in the years ahead.”

Her thoughts were echoed by Oliver Letwin MP, Minister for Policy who said: “Strategic commissioning is important for opening up public services and providing choice to service users. As the Government seeks to encourage choice, accountability, and fairness in public services, it is an important time to consider the role of local government in helping to achieve these aims. This report provides a useful analysis of strategic commissioning, and offers practical lessons for how councils can improve the lives of local residents.”

“Local government faces a major challenge in delivering quality services in a time of austerity,” Alex Thomson, Chief Executive of Localis, said. “Quite rightly, many councils are thinking creatively about how they can achieve this, and adopting a strategic commissioning approach is the best way to help councils deliver better services for less money.”

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