Memorandum by MEND (COM 120)
COMMISSIONING
EXECUTIVE SUMMARY
MEND has provided evidence based primarily on
our direct experience of child weight management commissioning
by PCTs and DH. We believe that these observations have resonance
in other areas. We would also like to emphasise that this evidence
is not intended to be an exercise in blame. PCT management and
staff have had much organisational, cultural and process change
foisted upon them in an uncoordinated, inconsistent and unclear
manner. They have received insufficient instruction, guidance,
training and support in many fundamental areas. The consequences
of implementing several changes of such significance across the
complex PCT landscape have not been well thought through. Thus
there are questions over both the desirability of several recent
changes and how to remedy their poor implementation. This evidence
is submitted in the hope that it can shed some light on areas
that currently face challenges—as well as identify some
potential recommendations for improvement.
Current commissioning arrangements in the field
of child weight management are inefficient, ineffective and characterised
by limited accountability. The result is that theoretically allocated
public expenditure is having limited impact against intended targets.
In 2008-09 the unringfenced Healthy Weight, Healthy Lives
budget for PCTs was £65.9 million, with a stated policy
focus on child weight management. However, we estimate that only
a maximum of £6-10 million worth of child weight management
services were commissioned in that period, clearly illustrating
a failure of commissioning and offering lessons for improvement.
Some relatively simple steps can begin to address
some of the issues and make some rapid improvements in commissioning.
Reversing some of the structural changes should be considered—balancing
this against the capacity and morale for yet another organisational
change. Finally, we believe that there is the opportunity to trial
new light-touch methods of commissioning at low risk in the field
of child weight management—with significant implications
across many areas of chronic disease management if successful.
It appears possible to cut the Gordian knot of PCT commissioning
whilst improving value for money and service provision and avoiding
yet another fundamental restructuring.
INTRODUCTION
Evidence is submitted to inform the Committee's
Inquiry on the following points:
1. World Class Commissioning—what does
this initiative tell us about how effective commissioning by PCTs
is?
2. Has the purchaser/provider spilt been a success
and is it needed?
3. Commissioning for the quality and safety of
services.
No comment is made on commissioning; commissioning
and "system reform", or specialist commissioning.
CONTEXT
MEND is a social enterprise which grew from
research at the Institute of Child Health, University College
London and Great Ormond Street Hospital NHS Trust to provide clinically-effective,
scalable, responses to childhood obesity.
MEND's family-based behaviour-change programmes
are delivered from leisure centres, schools, football clubs and
other community venues. Services are delivered in partnership
with local organisations from over 300 locations across the
UK as well as in the United States of America, Australia, New
Zealand and Denmark. Currently, MEND is the world's largest provider
of community-based child weight management services.
The public health services provided by MEND
are commissioned by Primary Care Trusts and Local Authorities.
They are also sponsored by charitable and corporate donors.
The following evidence is informed by our experience
of providing child weight management services since 2004. If required,
specific examples can be provided to substantiate all the following
evidence.
EVIDENCE
1. World Class Commissioning—what does
this initiative tell us about how effective commissioning by PCTs
is?
1.1 In our experience within the child weight
management commissioning field, World Class Commissioning offers
very little to demonstrate the effectiveness of PCT commissioning.
Elements of the World Class Commissioning competencies are frequently
cited in conversation and service specifications. However, our
impression is that they are used as buzzwords rather than being
a means of driving improvements in commissioning and service provision.
1.2 Some of the 11 World Class Commissioning
competencies are encouraging ineffective and inefficient commissioning
practices. Consequently, performing well against the competencies
does not necessarily provide an indication of efficient commissioning.
For example:
1.2.1 Competency 6—"prioritise
investment of all spend": in its current form, this competency
does not sufficiently hold PCTs to account for the timing or quality
of their prioritisation. In the last year there have been several
examples of PCTs running full and costly tendering processes which
have then been annulled (at various stages but often at the end
of the process) due to financial constraints or reprioritisation.
Whilst prioritisation is occurring, its timing is sometimes detrimental
to commissioning effectiveness and is costing the PCTs and providers
excessive amounts of time, money and goodwill. This is particularly
problematic for small and medium sized providers who have a valuable
role to play in providing services to the NHS.
1.2.2 Competency 7—"stimulate the
market": formal tendering is commonly used as a response
to this competency even when the value/scale of the service does
not warrant this approach. This means that some PCTs (and any
bidders) spend disproportionate amounts of staff time and other
costs on tendering for services that could have been (and used
to be) commissioned more efficiently through other means. Full
tender processes over several months have been followed for contracts
worth less than £50,000. This competency is also intended
to encourage dialogue and engagement with providers yet it is
still common for PCTs to launch formal tender processes without
offering any opportunity for discussion that could aid development
of the service specification. In the child weight management field
this is exacerbated by a DH Framework Contract that does not allow
for any provider dialogue during the tender process. Since the
advent of World Class Commissioning and the DH Framework Contract
we believe that the market for child weight management services
has shrunk. This is a complex issue. If the process is too complex
or burdensome then busy commissioners without appropriate resources,
support or training will not prioritise the area.
1.2.3 Competency 9—"secure procurement
skills": as procurement resource remains in short supply,
some PCTs are sourcing this support from staff working in other
NHS or public sector organisations (eg acute Trust, local council).
Whilst this approach may satisfy some of the competency requirements,
it does not necessarily improve commissioning efficiency or performance.
In many cases, these procurement staff do not understand PCT commissioning
requirements and do not have the right knowledge to properly advise
their PCT clients. Examples include the provision of bidder response
templates that do not allow like for like comparison of bidders,
service specifications that illustrate a lack of understanding
of appropriate solutions and the withholding of the likely budget
range for a new service. The lack of budgetary information is
one reason why tender processes are annulled following bid submission.
PCTs have been unrealistic about the cost of meeting their service
specifications and provider offers are above their budget so they
abandon the whole process. This puts the quality of services at
risk and increases both the costs of commissioning and the risk
of annulling the process. This is despite the costs of such services
being in the public domain through the Cross Government Obesity
Unit ("CGOU") Framework Contract. A minority of PCTs
disclose their budget and this impacts positively on the duration
of the tender process and the likelihood of a contract award.
1.3 Recommendations:
1.3.1 Provide guidance to PCTs on minimum contract
size/value required for the tendering route to be viable and cost-effective.
1.3.2 Provide guidance to PCTs and/or mandate
increased joint commissioning between PCTs to ensure that tenders
are of sufficient size to be viable for both PCTs and providers.
1.3.3 Issue further guidance on disclosing the
budget that a PCT has available for a particular service in a
formal tender situation in order to minimise the risk that PCTs
receive offers that are completely unaffordable and beyond the
scope for negotiation.
1.3.4 Provide guidance on the benefits of and
how to engage effectively with providers prior to and during a
tender process (for example, through greater use of the "Invitation
to Participate in Dialogue" phase).
1.3.5 If deemed necessary as a stop-gap identify
ways that PCTs can commission such services without resorting
to the full tender process.
2. Has the purchaser/provider spilt been a
success and is it needed?
2.1 In our view the purchaser/provider split
has not been a success, particularly at smaller PCTs. We believe
that not only is it not required but in many cases the split is
detrimental to value for money, efficient procurement and rapid
implementation. In our area of expertise the split is rarely needed.
If the split is to become efficient a significant organisational
change and training programme is required at PCT level—nationally.
2.2 The provider/purchaser split appears
to be both theoretically flawed and poorly executed:
2.2.1 Theoretical flaws: The primary rationale
appears to be based on the principle of "creating a market"
and competition with all the supposed benefits that follow from
such constructs eg transparency of information, efficient commissioning,
competition, reduced prices and product/service innovation. The
secondary justification was the observation that some PCTs were
abusing their combined role to either exclude third party providers
or to provide a poor level of service at an above market cost.
The first is a theoretical construct that has been shown to be
invalid (to a disastrous degree) even in financial markets. It
is also optimistic at best to assume that a structural change,
with little associated cultural change or training programme,
personnel change or central support will facilitate a market and
competition. In fact, when replicated in principle (but with different
forms) 150 times around the country with no such clear guidance
and control the result is an expensive mess with no standardisation
and very low levels of transparency of information. The most widespread
training seems to have been around the principles and process
of World Class Commissioning, resulting in an at-best translucent
market with imperfect information flows further constrained by
cumbersome bureaucratic processes for even small contracts. We
believe that despite the provision of significantly more funds
the value of commissioned child weight management services has
shrunk since 2007-08. Finally, a whole new management and overhead
structure is required to lead and support new provider organisations.
We do not dispute the second observation—namely that some
PCTs may have abused their combined position,—but neither
do we agree that the chosen solution is either justified or optimal.
2.2.2 Poor execution: Whatever the conclusion
about the theoretical need for such a split it has clearly been
poorly managed and supported. PCT procurement has long had a poor
reputation. To take the competence which is largely held in low
regard internally and externally and make a fundamental structural
adjustment to ensure that it is THE key function of PCTs going
forward is a strange management decision. Hard pressed PCT staff
have not been given appropriate central guidance or training with
the result that there are a large number of different models with
varying levels of competence across functions.
2.3 The split has not been implemented consistently—geographically
or by function.
2.4 Smaller PCTs in particular have struggled
to manage the split effectively due to small numbers of staff
in relevant teams. Consequences include poor commissioning practices,
significant delays due to double commissioning (in the case of
child weight management services this means first buying the training
and programme resources and then separately buying a delivery
team), increased costs (as the process is more bureaucratic so
informal networks cannot be leveraged as effectively as previously)
and poor value for money (VFM).
2.5 To ensure the continued existence of
the provider arm—or parts that are spun off—the commissioning
body will often have to pay more for service delivery—especially
in the early stages. As a result VFM is impacted.
2.6 PCT commissioners have passed commercially
sensitive information from potential suppliers to PCT provider
arms.
2.7 As PCT provider arms often inform the
design of service specification for tenders, they have an unfair
advantage over non-PCT providers. Service specifications are sometimes
designed so that they can only be implemented by local providers.
2.8 If all PCTs were to commission child
weight management services on average once every two years and
current commissioning practices continue we estimate that the
commissioning costs ALONE would amount to £2-6 million
per annum.
2.9 Recommendations:
2.9.1 Training: There is an urgent need for training
in the basics, such as how to commission a service not a product,
how to assess value for money, basic MS Excel skills.
2.9.2 Consider the establishment of central procurement
hubs/centres of excellence which focus on specific conditions/service
areas, such as child weight management, and so can understand
the complexities of services, the need for localisation and also
optimise value for money through bulk procurement. This mitigates
the need for replicating the same capabilities, with very variable
abilities, 150+ times at each PCT. Commissioning should improve,
localisation should improve and costs should reduce.
2.9.3 Strongly consider reversing the provider/purchaser
split, with the associated disruption this would cause, and provide
clear guidelines, training and central support for commissioning
and a rigorous and transparent audit/complaint handling "watchdog"
with sufficient powers to make changes and reverse poor decisions.
2.9.4 Provide clear (binding?) guidance for newly
formed PCT provider arms—for example to prevent them developing
new interventions if it would be more cost and clinically effective
to train their staff in the delivery of a proven programme
3. Commissioning for the quality and safety
of services
3.1 Guidance for commissioners produced
by the CGOU and the National Obesity Observatory ("NOO")
that should support quality and safety standards has often not
informed service procurement. Primary outcomes of tenders, and
even the basis of payment on results, have included those that
are contra-indicated by NOO, NICE and experts in the field—and
are actually potentially harmful eg weight loss for children
3.2 The pressure on PCT provider arms to
become self-sufficient as legal entities encourages unnecessary
in-house service development (precisely the poor VFM behaviour
that justified the spilt) which does not necessarily take account
quality and safety and published standards such as the National
Obesity Observatory Standard Evaluation Framework for Weight Management
Interventions.
3.3 At considerable expense, the CGOU established
a Framework Contract and associated Panel of Approved Suppliers
so that PCTs could commission child weight management services
efficiently at scale without the need to conduct a full OJEU process
on each occasion. Although a good concept, execution of this Framework
even at DH level with all associated experience and resources
was fundamentally flawed:
3.3.1 "Value for money" was the first
stated objective. However, the health outcomes of each provider's
service offerings were only requested after an in-principle decision
on the panel had been made. At no point was financial information
collected in a comparable format. Thus we do not believe it was
possible to assess value for money.
3.3.2 Another stated intent was to accelerate
the PCT commissioning process, ideally allowing a call-off contract
with local variations to be agreed within 4-6 weeks. A combination
of the poor quality of the Framework, poor local understanding
of the documents and process and the purchaser/provider split
has led to an elapsed period at least 6 months from start
of tender process to contract signature.
3.3.3 Commercial Department representatives on
the CGOU assessment panel showed a poor understanding of both
the subject and how to commission a service—as opposed to
a product.
3.3.4 CGOU's legal counsel had a poor grasp of
requirements, resulting in an inappropriate and inflexible contract
causing suppliers aggravation and reflecting neither the stated
needs of PCT commissioners, NOO guidance nor academic evidence.
3.3.5 Since the Framework's inception in April
2009, uptake has been low (six PCTs, one of which annulled the
tender process after appointing a preferred bidder due to financial
constraints). Some PCTs chose to procure services outside this
Framework.
3.4 Services which are not clinically validated
and which offer neither proven health outcomes nor value for money,
are still being procured by PCTs in favour of alternatives which
are evidence-based. This is partly due to the purchaser/provider
split which puts pressure on the newly formed provider arms to
become self-sustaining enterprises. In the child weight management
field, many Providers are launching pilot programmes (which can
run for an indefinite period) which receive very little scrutiny
on safety and quality and do not comply with published standards.
3.5 Despite clear evidence that poorly designed
child weight management services can cause children and young
people to develop eating disorders and other psycho-social problems,
this has received limited, if any, attention within the commissioning
process. This relates to the need for ongoing monitoring and evaluation
or to any evidence that particular services have demonstrated
a good safety record. Such negative consequences not only impact
on service users but also the value for money of the proposed
service since additional treatment costs are incurred in a percentage
of cases but not costed into the tender.
3.8 Recommendations:
3.8.1 In response MEND and partners have developed
an alternative model to procure child weight management services.
This approach supports improved quality and safety standards as
it encourages efficient commissioning, value for money, accountability
and payment by results, as well as delivering measured health
outcomes in line with NICE and NOO recommendations. It also allows
for commissioning on an "industrial scale" as recommended
by Lord Darzi. We would be happy to discuss this in more detail
if this is of interest to the Committee. We believe that this
approach has widespread application outside of child weight management.
MEND thanks the Committee for the opportunity
to respond to the Inquiry and would be happy to contribute further
detail if required.
February 2010
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