The method: commissioning
32. Much of the government's policy for getting the
best out of the third sector can be summarised in one word: commissioning.
There are other aspects—the Third Sector Review spoke of
"multiple roles of the third sector in transforming public
services",[34] including
as campaigners for change and as innovators from which the public
sector can learn—but it is clear that commissioning services
is the primary tool the Government intends to employ in harnessing
the third sector's transformative potential. Unfortunately, it
is less clear exactly what the term "commissioning"
is taken to mean.
33. In the context of public service delivery, the
term "commissioning" has a specific technical definition.
In the context of our inquiry into commissioning public services
from the third sector, however, we have found the term to be used
more broadly and in a varied way across the evidence we have received.
It appears that a shared understanding across the sector of what
commissioning means is still somewhat under construction.
34. The Baring Foundation were among several witnesses
to suggest that the terms used to describe the various mechanisms
for transferring funding to the sector are often applied in a
confusing way. They interpret commissioning as synonymous with
the Treasury's definition of procurement:
The Select Committee's inquiry defines its focus
as "commissioning". A recent HM Treasury report which
sought to provide guidance on improving financial relationships
with the third sector used the word "procurement". We
take both terms to mean the process of "acquiring goods and
services in line with the government's policy of value for money,
normally achieved through competition".[35]
35. This approach has resonance with the use of
the term commissioning in much of the evidence submitted to this
inquiry by frontline organisations. However, the Treasury guidance
from which the definition of procurement is drawn, while not defining
commissioning separately, does appear to recognise it as something
distinct from procurement. Specifically, it suggests that commissioning
is a process that comes before procurement.[36]
36. The Commissioning Joint Committee (CJC), a body
drawing together representatives from across all the disciplines
involved in the commissioning of local authority services, also
draws this distinction, defining commissioning as:
the process of deciding what work or services
are needed; whether they should be sought by delegation, the use
or setting up of some new body, or by competition; and, if by
competition, what sort of contract to use.
This definition is distinct from, though related
to and overlapping with, the CJC's definition of procurement:
the complete process involved in identifying
the business need to make a purchase, including market research,
specification, purchasing, and subsequent contract management.[37]
The inference from these definitions is that commissioning
is an "upstream" process of intelligence gathering and
needs assessment which may then result in a "downstream"
procurement process if competition is indeed thought to be the
best way to provide the service needs identified. A fairly similar
inference can be drawn from the preferred definition of the new
Institute of Commissioning Professionals, which is that commissioning
means "securing the services that most appropriately address
the needs and wishes of the individual service user, making use
of market intelligence and research, and planning accordingly".[38]
37. Inherent in this definition of commissioning
is that it does not necessarily lead to a decision to launch a
competition or issue a contract. It might be that the needs identified
in the commissioning process are felt to be best met by statutory
sector provision. Moreover, where external provision is thought
appropriate, commissioners have opportunities to use procurement
or donor type relationships as appropriate. In our evidence, however,
use of donor-type funding and grants is often discussed as an
alternative to commissioning rather than a potential outcome of
it. In their thought-provoking submission to us arguing for 'clearer,
more discriminating thinking about commissioning', Community Links
attempted to square the circle by effectively laying the blame
at commissioners' doors:
If a very high proportion of the elements are
pre-specified by the funder and there are no significant elements
of flexibility, the use of the term "commissioning"
is rhetorical and confusing and "tendering" would seem
to be … the more accurate description.[39]
38. Lord Adebowale told us that the first thing that
needed to be done to improve commissioning was to define it satisfactorily.[40]
This is clearly important. Although there are some exceptions,
many third sector organisations seem to see commissioning as coterminous
with procurement, whereas most commissioners do not. Of course,
Government also commissions services from the private sector.
If there is no common understanding of what commissioning means,
that can only be a barrier to effective relationships. Government
and the private and third sectors need to come to a commonly accepted
definition of commissioning if it is to continue to be the State's
preferred method of interacting with the sector. In particular,
Government needs to convince the third sector that commissioning
is something distinct from procurement.
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