John Jolly of Blenheim CDP questions the procurement, tendering and commissioning processes in the UK.
I’ve been sharing concerns for years with other CEOs and senior managers about poor procurement and tendering in the drug and alcohol sector – usually just quietly, over meetings with coffee. When I spoke recently to Martin Barnes, CEO at Drugscope, the umbrella organisation for the field, we shared long-standing worries about the state of commissioning in many areas.
To really address the issue, however, we need evidence of the impact on staff and organisations, and examples of poor practice and waste. How much does it cost service providers to tender? How much money do commissioners spend on consultants? We cannot just complain about the process; we have to demonstrate its impact, unfairness, and consequences for service users and on service provision and quality. It is perfectly legitimate for local authorities to retender work provided to them by contractors, but in the context of Big Society there needs to be a level playing field for the third sector and local third sector providers.
Poor and frequent commissioning has a number of serious consequences, not least of which is the cost. An exercise to quantify the costs of tendering services more than years ago came up with a figure of £300,000 expended by all bidders and the commissioner per tender.
We have to accept that tendering of services is here to stay and that providers will all win and lose contracts. However, I think there is a case to be made to increase from the standard three-year contract to a seven- to- ten-year minimum contract length – or possibly longer.
The contracts are often very one sided and allow cancellation with three or six months’ notice. Often providers are asked to agree to the contract as a condition of being allowed to tender, which is clearly unfair. Contracts need to be far less easy for local authorities to wriggle out of, with an expectation that any but the most major changes required are done via contract variation rather than retendering, except where there are clear performance issues.
At Blenheim we are concerned about the minimum turnover requirements that are beginning to affect the ability of small providers to tender for contracts they currently hold. This is where to bid for work you have to have a minimum turnover of, say, £5m or £10m. I am aware of many smallish and medium-sized charities that have not been able to bid for their own contracts back in their own right, forcing them into shotgun marriages with other providers as junior partners. This has on occasions included Blenheim, despite us being in the top 750 charities in the UK by income out of 66,000 charities.
Partnerships have a lot to offer and Blenheim is in many great and highly effective partnerships, but they rarely work well when they are marriages of convenience.
Blenheim is concerned that we are starting to see the demise of local third sector organisations operating and attuned to local communities, and their replacement by profit-motivated or organisational-survival-motivated or growth-driven organisations. This I already hear and see impacting detrimentally on service provision.
Blenheim is concerned about minimum standards in the drug and alcohol sector, with the move to local authority commissioning and the demise of the National Treatment Agency. Providers are all being forced to compete on price rather than quality, and this has a direct impact on who is employed or made redundant. The people that service providers employ and their skills and ability is what makes the difference to the mothers, fathers, children, sisters, uncles, neighbours, friends and grandparents with a drug or alcohol problem that we are here to help. These people deserve a quality service, delivered against exacting standards of performance and staff competence, not the cheapest available.
Blenheim is deeply troubled about the many instances of poorly managed tendering processes which create huge wastes of time and effort both at commissioning level and within provider organisations. This is now a regular occurrence and issues have included unfair decisions, lack of transparency about the process, and lack of knowledge about tendering and procurement within tendering teams. A number of tendering processes have to be suspended due to flaws in the process, and there is complete lack of understanding by many commissioners of TUPE rules.
There are attempts to dump significant pension liabilities on incoming organisations where the NHS or local authority is the outgoing organisation, and there are sometimes completely ludicrous and unworkable specifications. Local authorities often transfer risk to providers via payment by results with poor data to assess risk – often in relation to performance targets the provider has little control over.
At Blenheim we think its time we should stop talking and start acting, as a provider and a sector, to raise these concerns via DrugScope and other forums.
John Jolly is chief executive of Blenheim CDP