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Getting value from local voluntary organisations

April 5, 2016

blog contracts

You can’t buy long term relationships with short term contracts

The growing recognition of the importance of relationships, user experience and public voice highlights the urgent need for commissioners to look more closely at their culture and behaviour.

Although there are exceptions it too often feels as though the main mechanism for ensuring value with small voluntary sector organisations is through using 3 year contracts (sometimes with a roll over year) at the end of which commissioners go back to the market and tender again. I think this is often destructive and fails to capitalise on the opportunities presented by ‘local’.

Its not as if there were no other examples:

  • Its quite usual for an NHS hospital to have at last a 5 year contract to deliver a particular service agreed with a Clinical Commissioning Group
  • Most GPs have no fixed contract period
  • Academies are offered 125 year leases on local authority schools and land for a token amount
  • Commissioning organisations like Clinical Commissioning Groups work have no specific length to their existence or roles

All of the above are subject to a range of measures, performance systems, inspections, challenges etc that are used to ensure quality and value for money – the main mechanism is not market testing.

Short contract periods are often used because they are believed to be cost effective methods that can be used to assure the public that value has been achieved.

This is quite different from actually achieving value!

I worry that:

  • A reliance on market testing and 3 year contracts takes responsibility away from commissioners of services to engage and foster collaboration with providers to ensure value.
  • Is often used unthinkingly for local relational services – like Healthwatch – which rely on time to build relationships with members of the public and local organisations
  • It does not take account of the strategic role of key smaller services such as Healthwatch confusing size of investment with strategic relevance and therefore allow system leaders to pass responsibility for quality assurance to comparatively junior contract managers who lack the position and strategic position to adequately assess competence.

The balance is of course shifting once again with a greater emphasis on localism and on new structures such as Accountable Care Organisations that seek to build relationships across different providers and with communities. Nonetheless, there is a risk that the emphasis here will be on relationships between the big players – leaving smaller voluntary organisations at the mercy of cruder mechanisms like fixed term contracts and tendering to ensure value.

Solutions?

Evidence and Collaboration

The work we have been doing with Healthwatch England starts to go some of the way to trying to address – using a 360º stakeholder survey that the contract manager/commissioning lead can use (in partnership with local healthwatch) to capture the views of wider players at both an operational and strategic level and then get a system level discussion going that generates a shared view of actions that can be taken to increase effectiveness not just by the local local Healthwatch but by all health and care organisations in the local system.

This sort of model can be used to gather a more sophisticated view of similar small VCS organisations whose role is complex, multi-sectoral and relational. For example community anchor organisations whose contribution is often ‘chunked up’ and defined by separate contracts that fail to capture the relationships, processes and added value. Its important to note that the Scottish Government is moving ahead on making core grant aid infrastructure funding available directly to Community Anchors.

Contract and Grant Aid – theory and models

There remains a crying need for local government and Clinical Commissioning Groups in particular to develop a more sophisticated view to how to best to ensure performance and value. There needs to be an urgent review of funding and performance levers that considers the respective roles of:

  • Small and larger grants
  • When fixed term contracts work and what length they should be
  • What skills and capabilities local systems need to have in place to drive transformation and value

What do you think?

2 Comments leave one →
  1. Susan Smith permalink
    April 5, 2016 09:52

    Massively important issue for Sheffield in my opinion. Thanks for articulating it so cogently.

  2. April 22, 2016 04:10

    Very thoughtful of you to focus on such an important issue. We need more of these organizations for the society.

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