Memorandum from Rotherham Metropolitan
Borough Council
1. What are the benefits of contestability
to the users of public services?
(a) Have services which have been transferred
to third sector organisations shown improvements in quality?
Our experience in transferring low dependency
day care has resulted in maintenance of quality standards and
value for money. This has been evidenced through a Best Value
review of community services.
(b) Is loss of accountability a threat of
commissioning services? If so, how can this best be managed?
We do not believe there will be a loss of accountability
with effective contract management and monitoring arrangements
in place to ensure individual outcomes are met. Responsibility
for meeting individual needs will still be retained. The introduction
of Direct Payments and Individual Budgets gives greater choice
and control to service users enabling them to retain a degree
of accountability and risk.
2. Is the third sector more likely to provide
better public services than the state or the private sector?
(a) Is there evidence that where services
are provided by the third sector, that they are popular with those
that use them?
Yes—evidence from contract monitoring
and service user forums. This is particularly true of services
providing advocacy, self-advocacy, leisure and employment support
particularly for people with learning disabilities.
(b) Is there evidence of demand for more services
to be provided by the third sector? If so, who from?
We are unaware of specific evidence. Service
users tend to choose and value a service irrespective of the provider
as long as their needs are being met. However, from time to time
a very small number of service users or their carers will express
dissatisfaction with their current support arrangements and at
these times, alternative services through voluntary and independent
sector organisations have met the need. On occasion service users
have come together and considered establishing their own service,
eg advocacy services.
(c) Do public services provided by the third
sector more accurately reflect the changing needs of those that
use them?
Some third sector organisations have traditionally
provided services geared towards lower level prevention and specialist
service needs that local authorities have been unable to meet.
This is particularly true of advocacy services, but is less true
of services providing larger services such as supported living,
residential care etc where services often seem to struggle to
meet the changing national agenda and changing needs of service
users. In many cases, request for additional staff support (and
therefore funding) are made to meet challenges, rather than seeking
to provide more creative and appropriate options.
(d) Is there evidence that contracting to
the third sector leads to greater scope for innovation in public
service delivery?
We consider there is a mixed picture dependent
on the nature of the service and particular market. Given the
shift towards higher criteria for access to services it could
lead to less scope for innovation. Given the correct contracting
environment, services such as Rotherham Speak Up, have been able
to develop their service, to attract further funding, to develop
as a leader within the national agenda on support for self—advocates.
Large third sector organisations can also draw
on experience and innovation projects in other areas of the country.
3. Does commissioning benefit the third sector?
(a) Will contractual relationships with the
state improve stability within the third sector?
Potentially yes, provided there is long term
planning and funding commitments. The provision of three year
contracts would provide the opportunity for some organisations
to build on and develop new service models such as user-led social
enterprises. Projects such as these require significant lead in
time, and as such a longer contract provides the ability to develop.
The role of third sector support organisations such as Voluntary
Action Rotherham and the development of a local Compact can assist
development of the sector and also prevent "fall out"
when third sector organisations may be competing for the same
funding.
(b) Will close involvement with service provision
prevent third sector organisations retaining the ability to be
critical of government?
We consider there are strategic questions to
be considered by individual third sector organisations. For large
third sector organisations it will be possible to manage both
service provision and campaigning. For smaller organisations it
may require decisions as to the key aim of the organisation and
how this may be funded.
(c) Is there a risk that the service providers
will become increasingly bureaucratic?
This largely depends on the nature of the contracts
with the third sector—in some cases, services are required
to comply with the national minimum standards, and a certain amount
of "bureaucracy" is required.
(d) Is there a risk that third sector organisations
will lose their independence, their identity or their distinctive
ethos?
There is a risk but each organisation will need
to address their primary function and strategic direction.
(e) Might the third sector become polarised
between large service providing organisations and more radical
groups? If so, would this matter?
There is a risk. From a commissioners point
of view it does not matter as long as individual needs and outcomes
are met. From the perspective of service providers it can provide
more sustainable funding but for smaller campaigning organisations
it could affect the availability of funding and therefore viability.
4. Does commissioning services from the third
sector have any benefits for the state?
(a) Does the state risk losing control of
service delivery in a way which might be damaging?
No, we consider that the state will retain control
through commissioning strategies and contract management. We consider
that in this way the state will continue to meet its duties to
arrange provision as opposed to providing services.
(b) What capacity will the state need to ensure
that it can be an intelligent customer of services?
The state will need appropriate commissioning
structures, funding and regulatory capacity. An ability to work
with the sector, a willingness to be transparent and an understanding
of the pressures on the sector are equally important.
The state will also need an effective understanding
of how providers operate and structure their business (including
operating costs and profit margins) and also a very real understanding
of the outcomes required by service users and how providers might
achieve these, in order for the state to direct service provision
in the required direction. Good providers will provide creative
solutions, less good providers will fall back on established methods
which may not be person centred or meet the outcomes desired.
(c) How is duplication of effort in order
to monitor and manage contracts best avoided?
Assuming the question means duplication of a
third sector provider with several authorities, then a sub regional
response to commissioning would avoid duplication and provide
efficiencies in relation to very specialist services. Similarly,
joint commissioning between health and social care can also contribute
to avoiding duplication.
(d) How good is the state at managing bidding
processes and defining contractual obligations when commissioning
services?
We feel that local authorities have been developing
their skills in this field since the introduction of Community
Care in the early 1990s which may not be as evident in health
services. There is still a lot of work to do around performance
management, ensuring that outcomes for service users are achieved,
ensuring that targets are met, and ensuring that services develop
in line with national principles, values frameworks etc.
5. What are the financial implications of
providing services through the third sector compared with directly
provided state services?
(a) Are services cheaper to provide?
Yes, for some dependent on the market, due to
current differences in terms of conditions between the state and
third sector organisations, overheads and access to funding streams.
For some third sector organisations these may not be so different
(b) Are there hidden costs such as contract
oversight?
We do not believe there are as currently service
provision is overseen anyway both in-house and externally.
(c) Are the benefits of the third sector participation
in public service provision so great that it is appropriate to
have financial rules which encourage this, or should the aim be
to have "competitive neutrality" between public, private
and voluntary sectors?
We believe there should be a "level playing
field".
6. Are the costs and benefits to the state
the same when commissioned from the third and private sectors?
We feel generally that the costs of commissioning
from the third sector ought to be less than from the private sector
as there is no profit element, less overheads etc. This assumption
needs to be examined, however, in each case as; simply providing
a service through the third sector will not always guarantee cost
effectiveness. Some services, including day services for people
with learning disabilities, can be more costly within the third
sector.
March 2007
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