In my second post on successful elements of public procurement strategies in local government, I will dive into the increasingly common practice of 'Commissioning' in the UK and its connection to procurement. Many local governments have now created a sophisticated, outcome- and user-focused approach that relies both on measurement and entrepreneurial leadership. This article is based on a review of the procurement strategies in six UK cities (read Part 1 for context).
Procurement ≠ Commissioning
Procurement is not the same as Commissioning, but increasingly interwoven as both functions try to engage closely with stakeholders from need identification to measuring service performance and impact.
Liverpool's procurement strategy defines procurement and commissioning whilst clarifying that procurement is a core part of a commissioning cycle
Commissioning is the process of ensuring that outcomes identified in the Council’s need analysis are delivered through the right service and the right models of delivery regardless of whether public, private or other sectors through voluntary service sector, or through social enterprises.
Procurement is the process of acquiring goods, works and services. It includes acquisition from third parties and also from in-house providers. The process spans the whole cycle from identification of needs through to the end of a service contract or the end of a useful life of an asset. It involves early stakeholder engagement, assessing the impact on relationships and linkages with services internally and externally, options appraisal and the critical “make or buy” decision and determining the appropriate procurement strategy and route to market.
To me, one of the best commissioning stories is Sefton Council's Peter Moore retelling explaining the de-commissioning of their meal's service - meaning that despite the city cutting subsidies it managed to deliver better outcomes and community benefits by focusing rigorously on outcomes. Importantly, it highlights the personal leadership and commitment that underpins the process - commissioning is not a technocratic answer to community needs but a rather entrepreneurial journey.
The UK Cabinet Office structures commissioning into six steps:
- What's the question?
- Get to know and work with your customers
- Define the Outcome and Priorities
- What will it look like?
- How will you get there?
- Measuring the impact
Commissioning + Procurement: A bit of magic
It is the interplay of the holistic commissioning approach with innovative and outcome-oriented procurement that has redefined the practice. Commissioning puts the desired outcome first, qualified by understanding user needs and with a mandate to re-align resources across departments to deliver the best outcomes.
What ties these functions together is the focus on users and outcomes. Both functions are looking for new delivery models (including new contractual models), and use a metric/data-driven approach. It is notable that the procurement strategies refer not only to spending and contract analytics, but measuring actual service outcomes. In the case of Wakefield, on a monthly basis.
Measure, Design, Manage, Measure
It is logical then that the procurement strategies in UK local authorities integrate measurement, metrics, KPIs, citizen and supplier engagement into every step of the commissioning and procurement process.
Baked into their strategies is a cyclical commissioning - procurement approach:
Liverpool and other cities all highlighted the importance of investing in contract management and supplier relationships. Both are interrelated and often under-resourced, yet when managed proactively have a multiplying effect on procurement outcomes. Measuring performance remains important throughout this process.
Measures deployed include not just regular performance reviews with suppliers, but also using category management to prioritize key service areas like adult social care and building deep relationships with strategic partners, service users and the market more broadly. It is easy to see how commissioning, category management, planning and foresight come together into a systemic approach that is centered on the desired outcomes.
The New Normal is Exceptional
Whenever I have the chance to meet the procurement directors, commissioners and category managers that operate this integrated model I cannot help but being impressed by the professionals and their clarity of mission. I should add that this is by no means limited to a few super-star teams in major cities or reliant on grants or external resources.
Quite the opposite. We are seeing a model coming to fruition that has been supported by an evidence-based practices shared among local, regional and central government of all political colors. Devolved governments like Scotland and Wales as well as the many local governments they represent appear to organically align around this common vision and practice.
As always, do share your thoughts, feedback and corrections to my musings. In my next post in this series, Part 3, I will dig into the green, climate and environmental angle of these new procurement practices in the UK.
If you are interested in speaking to us about our experience implementing procurement innovation in 100+ cities in 35 countries, including the talented procurers, commissioners and category managers in the UK, get in touch!