Commissioning for social change

About Nacro

We are a social justice charity and the range of commissioning that we are exposed to includes making social change, helping to turn the lives round of those that are vulnerable or disadvantaged and helping those with challenges to achieve their aspirations. We pursue contracts that relate to our charitable purpose so we are concerned with delivering impact.

We have four main business strands, housing, education, health and justice, all of which work in different markets. We work with a wide range of commissioners across central government, local government and other statutory and voluntary agencies. We attend market engagement events, provide models to solve commissioning priorities and review over 600 commissioning opportunities every year. We decide to bid based on strategic fit, viability, win ability and passion for the work. Our revised strategy will see us developing local service hubs where we seek to provide a holistic range of services. This will influence our choices in the future.

Biggest opportunities for working with commissioners differently

1. Publish a local area commissioning strategy to provide advance notice of future commissioning so that providers can prepare their offer and how they can make a longer term, strategic impact in a wider area – including in support of devolution.
2. Understanding the financial strategy of a commissioning body can help providers to develop the right solution. We recognise the huge budget pressures that the public sector is under and the opportunity of self financing. For example it might be that a commissioner will find capital funding easier or preferable to deploy than revenue funding.
3. Working collaboratively with commissioners, stakeholders and multidisciplinary partners in the design, delivery and review stages of a service. Longer term contracts that allow for investment but with collaboration and change built into them.
4. Pre commissioning assessments to understand the costs of workforce change and make sure these are properly understood by bidders. We recently decided not to rebid for an existing contract because it was not viable to do so when the costs of workforce change were factored in. A small local charity bid for and won the contract with potential perilous implications on their financial position.
5. Take a strategic view of the people issues including looking at the capability of the existing workforce to meet new delivery models and ensure the change management process is well managed. Contracting cycles can be morale sapping for staff which ultimately impacts on service users.

Examples

Stockport Alliance Based Targeted Prevention Service – all partners have equal payment and risk terms, and so they are encouraged to collaborate.

East Kent Prison – our resettlement work is being co-designed with the commissioner and local stakeholders over the initial phases of the contract to build a service that is based on local need. Commissioners should therefore consider how they can facilitate collaboration between partners to achieve better service outcomes.

Two-stage negotiated procurement process – we are currently bidding for a £45m Government housing contract involving a negotiation stage providing an opportunity to understand commissioners requirements and develop a best and final offer. Seeing the human reaction to proposals and ideas is more effective than transactions over a procurement portal.

Funding workforce change – the support of the commissioner to help us manage significant change in the mobilisation of a county wide young peoples service. With 30% savings built in, increased volume and a higher needs group it simply wasn’t possible to fund the costs of workforce change.

Biggest challenges and ways to fix them

Red lines – the unquantifiable costs of pension liabilities – we can not take historical pension liability on our balance sheet and therefore avoid LGPS staff. Also, payment by results contracts with uncertain demand patterns are high risk.

Local labour markets – staff resourcing and recruitment for service delivery roles can be challenging and significantly increase our costs. Depending on the type of service, service providers will be recruiting from the same local labour markets. When a contract provider changes, it makes no sense for costs to be expended on redundancy payments when we should be investing in skills and ensuring fair salary levels.

What to avoid

Outsourcing social change – this needs to be developed along with organisations whose core purpose is to deliver change rather than deliver contracts fixed at a point in time.

Financial risk – there is often a mismatch between the organisations that have the operational track record and expertise to deliver solutions and their capacity for financial risk. Central and local government can provide working capital more cheaply than some providers can secure. Deferred payments in contracts and in some social investment models can also be challenging to take on.