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Councils embracing commissioning role

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Some 80% of English councils are considering taking a greater strategic commissioning role in the delivery of their services, according to fresh research.

Local authorities have gradually shifted towards commissioning services rather than providing them in-house but the economic crisis has accelerated the process, research by the thinktank Localis has found.  

The thinktank’s survey of over 100 council leaders and chief executives found for every council that believed more services will be delivered in-house in the near future,16 more anticipate less in-house delivery.

Those that thought commissioning would play a greater role predicted a shift in provision to voluntary organisations (82%), public sector shared initiatives (81%), small and medium size businesses (75%) and large companies (68%).

The report stressed the importance of councils being ‘provider-neutral’ and focusing on the needs of local residents over and above political ideology.   

With council contracts a lucrative marke - total non-external local government expenditure stands at approximately £65bn according to the report - which sector provides services has become a highly charged political issue.   

The report has received backing from all three major political parties and from council leaders and MPs.

Essex CC leader, Peter Martin (Con), said the study was timely as councils balance tight budgets with the key agendas of decentralisation, choice and diversity.

Former communities secretary Hazel Blears, who contributed to the publication, said: “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 improvement.”

Cabinet minister Oliver Letwin, 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.”

The report’s recommendations for central and local government

  • Focus on outcomes not processes – central government should promote national availability of data to compare provider performance to enable commissioners to make informed decisions. Councils should also be open-minded about who provides the services.
  • Support a thriving market for all sectors – central government should support councils to open up services to all organisations including small and voluntary organisations, by evidencing social return on investment and reducing procurement barriers.
  • Redefine risk – councils should redefine risk to ensure that money is spent on services which deliver the long term benefits.
  • Create smarter, more flexible contracts – councils should ‘value test’ and re-negotiate their contracts more extensively.
  • 2 Comments

Readers' comments (2)

  • Doug Forbes

    So why have Councils been removing commissioning posts and reducing capacity?

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  • Mo Baines

    I think one has to take this research in a more realistic context. Two very detail research studies by APSE have actually found councils insourcing services for a range of reasons, including market failure, and a need to take a more strategic role over local service delivery - often compromised when wrapped into outsourced contracts. Councils are using insourcing to develop local apprenticeships schemes, more holistic service delivery programmes, particularly around environmental issues, and effectively integrating community benefits into local service delivery and are keen to protect jobs within the local economy. The evidence is not that this is ideologically driven – quite the opposite in fact. Councils, of all political persuasions, are simply taking a pragmatic approach to what works in the context of the local economy and local service delivery need and finding an inhouse solution is often the most cost effective and efficient option and provides for good governance and accountability.

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