News and Comment

There’s more to commissioning than cost

Friday 14 October 2011

By:

Working with local authorities and others to help them improve their commissioning, I have encountered a lot of confusion about what specifications can and should contain.

In some places there is a view that lowest cost is the only thing that matters. But this can result in decisions that conflict with corporate vision and strategy and unintended consequences for communities, the environment and the economy.

Central government has just issued new statutory guidance about how social, economic and environmental value can be included in service, procurement and commissioning decisions. This guidance states that authorities should consider economic, environmental and social value when reviewing service provision.

Social value is defined as seeking to maximise the additional benefit that can be created by procuring or commissioning goods or services above and beyond the benefit of the goods or services themselves. This means that specifications and contracts (for all services including adult and children’s services) can include community benefit requirements.

Social value as standard

The new guidance is significant because it means that commissioners can specify environmental, social (including local governance and evidence of community involvement and leadership) and economic (jobs and apprenticeships for local people) as part of their general requirements. This can be done by some corporately agreed ‘must-do standards’ for all contracts (like a preamble in a building contract) and a clear commissioning policy.

We have been advocating this for a while through the Commissioning Support Programme (CSP) and more widely in our work with local government. It is also of great potential value to health and well-being boards where it helps public health people to link the environmental and exercise (bikes and walking) benefits with contracting for public services, including health services. It may also make it easier for local voluntary and community organisations to win work as long as they can demonstrate community benefit through community and service-user governance, reduced carbon footprint and local employment.