News and Comment

Localism – a new opportunity for local government to take the lead through strategic commissioning

Tuesday 2 November 2010


Whilst much is still uncertain about the direction of local government there is undoubtedly one window of opportunity. This is for local authority leaders to take a lead locally, relatively unfettered by central and regional government.

The coalition government has made it clear that central government will not be telling local authorities what to do or how to do it. Central government funding will seldom be ring-fenced. Therefore directors of adult and children’s services will need to work as strategic commissioners of the whole system, to develop and agree local policy and strategic plans for themselves.

This will not necessarily be easy. One of the unintended consequences of the last government was to leave adult and children’s services littered with a plethora of projects programmes and pilots each with its own strategy, partnership and performance measures. This created a burden of internal transaction costs, duplication, fragmentation and confusion.

However, the opportunity is that this can now be replaced with a clear system led by commissioners whose decisions are outcomes-focussed, needs-led and evidence-based. Well done and this will result in skilled practitioners working closer to the frontline. It will lead to cultural and behavioural change backed by excellent whole system performance management. It offers a new approach to running meetings, supervising, supporting and valuing staff. It will also ensure that words are followed by actions.

The 4 steps of commissioning and commissioning policy

Commissioning brings together much of what local authorities have been doing for a long time into four straightforward steps: Understand, plan, do and review. Understanding needs, using evidence of what works and knowing the cost and value of services will mean that plans are credible and defensible. Full consultation on plans for change will mean that they are more likely to be supported and understood by service users and service providers. These plans will need to describe and justify the proposed changes across the system.

In order to implement their strategic plans local authorities will need to develop and agree a local commissioning policy. This policy will describe how commissioners relate to service providers, how commissioning decisions will be made and the sorts of agreements and performance management which will be applied. It should be written in accordance with any corporate commissioning policy that already exists in the local authority and demonstrate that there is a ‘level playing field’ between service providers.

Tailoring commissioning policy across different public sector providers

Public services can be, and are provided by, an enormous range of different sorts of service providers. It helps to group these as follows: • Public sector – where employees are employed by local or national government • Voluntary and community sector (not for profit) – a range of ‘free standing’ organisations with governance including charities, trusts, mutuals, cooperatives, employee ownership, community interest companies, social enterprise and more • Private business – this includes the many sole traders and family businesses which provide public services including people who foster children and manage private care homes. This category also includes most GPs • PLCs and other for profit business – distinguished from private business by size, shareholder expectations and power in the market

Local authority commissioning policy will need to take into account the different characteristics, strengths and weaknesses of each sector. Commissioners need to understand these before making decisions about which organisations will be their best partners for the provision of essential public services. Trust and shared goals are better than the suspicion and detailed scrutiny of contract management, especially when services are for vulnerable people and children.

The strategic future of commissioning

No-one can foresee the future shape of public services and the balance between large (perhaps monopoly) providers and small, local service providers. However, people who want to make effective decisions about how best to use limited public resources to support those in need, and improve the lives of UK citizens, need to think about the long-term effect of their commissioning decisions.

Localism provides an opportunity for local authorities to lead commissioning decisions, and the agreement of a commissioning policy is a good way of involving political leaders and others in building a transparent strategic plan.