Commissioning and procurement are often confused. But they are two distinct areas of public sector activity
Over the last five or more years a great deal of time and money has been devoted to developing commissioning across the public sector. Indeed, there is a risk that it has become an end in itself whilst it should be a means.
For many the terms ‘commissioning’ and ‘procurement’ have been conflated. Sometimes out of ignorance and often because the ‘C’ word is regarded as a more polite and politically acceptable term than the ‘P’ word. The truth is that they are different – if at times related. Procurement can be one but only one means of implementing commissioning decisions.
Some local authorities claim to be ‘commissioning authorities’ but every local authority commissions. They intend it to mean that they are indifferent or even opposed to directly managed services – this is different from commissioning.
Commissioning is what any strategic organisation or individual should always do. Its core stages are to: identify need and aspiration; set outcome targets to meet the need and aspirations; identify the options for securing these outcomes; select the most appropriate option; and continually monitor and review performance and change – at which point the process becomes circular. Commissioning will usually be neutral about who should provide a service. But the choice may narrow as the outcomes are clearly defined, given that such outcomes are likely to embrace wider public goals than those associated with a single service activity.
Commissioning is not a discrete activity and nor is it one that happens at set dates. Rather, it has to be dynamic and continuous. In contrast, procurement is the means of purchasing services or goods from another agency, be it in the public, business or third sectors.
Procurement can, as I have often argued, be used to drive social, economic and environmental goals. It should also embrace market intelligence and some form of market management. It has to ensure that supply markets are open to new entrants and to a range of suppliers from the business, social enterprise and third sectors – and not solely restricted (openly or by default) to established large-scale players. Overly bureaucratic systems are wrong. Disproportionate demands such as capitalisation requirements and lengthy trading histories for small contracts are wrong too. Effective risk management is a different matter.
Competition and fairness are essential for effective procurement. This means no unnecessary obstacles and/or crippling terms. Where a public body, for example, a local authority, wishes to promote social enterprise or to open its service market to SME’s, procurement needs to be designed to achieve the objectives and not allowed, covertly, overtly or ignorantly, to erect barriers.
Public commissioning and public procurement should aim to build social and economic capital for the public good and not only for the benefit of providers. The outcomes and the resources allocation resulting from commissioning may be secured in a variety of ways and not only through procurement.
These can include ‘in-house’ provision, partnership or collaboration with another public sector agency, grants to the voluntary and community sector, regulation, seeking to change citizen behaviour – and many others. Increasingly some form of co-production and possibly co-payment may be part of the equation too. Innovation is essential and we have to do different things differently.
Effective commissioning must involve service users, the wider community, potential providers (so that alternative options are understood) and staff. Fundamentally, it is a mindset, and a political rather than a technical process. It is all about determining outcomes for citizens and communities, and prioritising and rationing the use of resources and services/activities – and those responsible for such must be accountable to the public.
Commissioning should have a strategic regard for the future and not just the present – and critically, for ‘value’ rather than cheapness. Sadly, the latter in particular is often being forgotten in an environment where expenditure pressures are distorting what should be strategic activities across the public sector.
Personally, I think that attempts to create a discrete commissioning profession and big commissioning departments guided by big rule-books are ill-conceived. Every manager, public service professional and politician must adopt a commissioning approach. There is a risk that the term is now taking us in the wrong direction and conjuring up the need for massive bureaucratic processes.
I’d be tempted to propose that we find a new term for strategic commissioning. Let’s be radical: how about ‘common sense’, ‘knowing what we need and want; what we can afford and how we are going to get it’ and ‘effective strategic leadership’? These are what is required – and required urgently from politicians, senior and junior public officials alike.