Is public sector commissioning broken?

By Rob Abercrombie 11 September 2012

In May this year NPC published a survey of charity’s experiences of public sector commissioning. It won’t surprise anyone that it showed charities are seeing a shift from grants to contracts for services. Increasingly these contracts are competitively tendered. This trend pre-dates the coalition and financial crisis by a long way, and has been going on to some extent since compulsory competitive tendering in the 1980s. It received a boost with New Labour’s ‘best value’ duty on local authorities in the late 1990s. So not new, but arguably accelerating as a result of the cuts to public spending—cuts felt particularly acutely by local government.

These commissioning changes haven’t been an entirely happy experience for the voluntary sector. There is a widespread feeling that the odds are stacked unfairly against charities when competing to provide public services, and there appears to be some evidence for this. I have heard horror stories about poor commissioning practices, crude application of inappropriate procurement methods, and outcomes that cannot be in anyone’s interests. I know from my own experience of bidding for public sector contracts that at its worst the process can be excessively bureaucratic and wasteful. The cost of bidding alone can be a significant barrier to charities participating.

More worrying, though, is the possibility that commissioning is not producing good outcomes for disadvantaged people and communities. Unfortunately examples abound where it isn’t. The charity working with a prison to design a new visitors’ centre, only to lose the running of the centre to a private sector competitor on price when it was tendered. Two charities in the same city seeing their services put out to tender by the council, the outcome being that they won each others service. And numerous examples of successful charities with well-established services, expertise and good will in their communities seeing it all swept away when the contract goes to an incomer with none of those things. This cannot be what commissioners are intending. If a process produces crazy outcomes then, however well-intentioned, can it be described as anything other than broken?

If you are a public sector commissioner reading this and your hackles are rising I apologise. I spent five years working with local government and I understand that much as those in the voluntary sector feel they have a very tough job at the moment (and many have), the same is true for commissioners. The commissioners I’ve met often share the values and good intentions of their counterparts in charities. They are equally committed to achieving the best they can for their service users, but they are in a very difficult position. Deep cuts in funding, growing needs in their communities, and difficult institutional constraints to negotiate. Not all commissioners have the luxury of worrying about what type of organisation provides services. They need the most economically advantageous provider, and competition is the shortcut to getting that. In this context charities’ grumbles often come over as special pleading. There is a sense at times that charities believe they are uniquely able to deliver social impact and therefore have a right to privileged treatment, but when asked to provide solid evidence for that proposition are unable to produce it.

There are respects in which public sector commissioning, whilst it may not be broken, works poorly. But in writing this blog I don’t mean to join the chorus of voices making that argument, my intention is instead to illustrate how polarised the views of charities and commissioners have become. Ironic given that their interests are often substantially aligned. There are many very able, reflective, and insightful people on both sides of the fence, and I believe there is real potential for a constructive dialogue about how we can collectively do better and deliver more with the resources available. That is happening here and there at a local level, and where it is, good things follow. The question is how we can make that the norm.