Public AdministrationWritten evidence submitted by NAFP, ICHA and NASS (PROC 15)

Background to Submission

The Nationwide Association of Fostering Providers (NAFP), Independent Children’s Home Association (ICHA) and the National Association of Independent Schools and Non-Maintained Special Schools (NASS) represent over 400 providers of children’s services, meeting the needs of over 17,500 children. Fostering, special education and children’s residential child care are distinct services and our organisations have received reports from members on the increasing time being spent on procurement-related activity. We are, therefore, delighted that the Public Administration Select Committee is investigating the issue of public procurement and would like to make a joint submission outlining concerns that members of our three organisations have received.

Procurement Survey

In May 2012 our three organisations jointly undertook a survey to explore experiences of local authority procurement. The responses we received from members were relatively evenly split between fostering providers, children’s homes providers and special schools. The organisations who responded to the survey are collectively responsible for over 4,000 placements for children and young people in England and Wales. Over half work with 22 or more local authorities and over three-quarters work with more than 10.

We have held discussions with senior officials from the Cabinet Office and Department for Education and have been encouraged by the initiatives announced by the Government including the Commissioning Academy and the Mystery Shopper Scheme. However, we would suggest more needs to be done to create real and lasting change on the ground for providers if they are to operate in an environment which does not create unnecessary red-tape.

Our members have reported significant procurement problems which they are experiencing at Local Authority level. The findings from our survey have led us to believe that the Government should create a national procurement framework that could be followed by all Local Authorities. This would reduce paperwork for providers and would be particularly helpful for those who work with multiple authorities, as well as supporting innovation to develop new services where a greater degree of business risk is necessary.

Our survey also included a number of suggestions on how Local Authorities could do to make the procurement process easier for providers and more effective in meeting the needs for children and young people. We would like to work with the Government and the Local Government Association to promote best practice guidance to support Local Authorities make the procurement process more effective.

Does the Government have the right skills and capabilities required to procure effectively?

What skills do procurement authorities require in-house, what skills can be bought in and what skills can be contracted out?

Our members have reported that procurement authorities often lack the appropriate skills when undertaking procurement. We would like to see more effort in developing the procurement skills. For example, our members have called for all local authority procurement officers to be trained in understanding the needs of children and young people and are supported by children’s professionals. We feel if this was to happen the quality of procurement would improve considerably and the outcomes for children and young people would be better.

In addition it has been identified that procurement activity is too focused on cost rather than the needs of the child and is too bureaucratic. In our experience key personnel are frequently diverted from deploying their accumulated knowledge and experience to completing imposed non-child directed tasks. This has significant financial costs in a climate with little scope for increasing fees and a commitment to high quality children’s services.

The key to both of the issues identified above is an understanding of the crucial role that relationships play. Good commissioning of children’s services should see the commissioner/procurer taken on a role akin to that of being a parent. Given that many young people for whom services are procured have Looked After status, we would see this as a logical extension of the “corporate parent” role. Similarly, we would assert that good relationships between purchasers and providers are the key to successful procurement outcomes. A greater understanding of pre-procurement cooperation and a commitment to co-production, in the context of legislative requirements, would, we believe, deliver procurement specifications and better value for money.

What lessons can central government learn from local government on procurement?

While in some cases local authorities are performing well, our members’ experience is that there are significant faults in local authority procurement of their services. We would like to see central government work with local government to drive up standards. Our members would specifically like to see the Government create a national procurement framework for all local authorities.

In order to support the role of local authorities in future, we asked our members how the procurement process for providers could be made more effective in meeting the needs of children and young people. Suggestions included:

Be open and transparent about the process and assessment criteria.

Build and maintain relationships with providers—this enables us to better understand your needs and ensure that we meet the needs of the children and young people that you place with us.

Ensure that local authority procurement officers are trained in understanding the needs of children and young people and are supported by children’s professionals.

Try to develop, rather than control, the market by focusing on issues such as the needs of children and young people, innovation and price flexibility rather than price fixing.

Simplify and reduce the amount of requested information both at initial procurement and in later quality monitoring.

Develop two tier processes with minimal information provided at stage 1. Providers which meet the selection criteria can then be asked for more detail at stage 2. This would ensure that unsuccessful providers need not invest the same amount as time as in a single stage process.

Create more opportunities to meet providers regularly, with a commitment to problem-solving and relationship building. This helps develop trusting relationships. Involve your in-house providers in these events to create a “level playing field”.

How successful are government departments and their agencies at communicating their needs to potential suppliers?

One of the key faults our members have identified is lack of face-to-face contact with commissioners. Providers often struggle to build up a relationship with commissioners and this causes a negative impact on the procurement process. Our survey noted that where there were opportunities to meet providers regularly it was easier to develop a trusting relationship which improved the procurement experience, though this could sometimes be presented as purely information sharing, losing the benefits of potential collaboration. It has also been reported that there is often a lack of information or poor quality information provided by the local authority. There have also been concerns about the lack of feedback from local authorities on the outcomes of tenders. We think that central Government could learn lessons from these experiences.

How should Government ensure that European directives on public procurement do not inhibit public bodies’ ability to procure effectively?

Over the past four years, recession and reduced local authority funding have brought cost and price into sharper focus. Additionally, as local authorities become commissioners rather than direct providers of services, there has been an increased focus on commissioning and procurement activity. Our survey found that European Union Procurement Rules increasingly drive the purchasing of children’s services from the voluntary and private sectors. In light of this we would like to see the Government do more to ensure that European directives, or a poor understanding of how to implement them, do not hinder public bodies’ ability to procure effectively.

For example, European Union Procurement Rules indicate that public bodies purchasing services whose overall value exceeds 200,000 Euros should go to open tender. However, education and social care services are listed as Part B services and authorities are not obliged to follow the full tendering process for such contracts. Despite this, and perhaps because of a culture of risk averseness, local authorities often behave as if these activities were Part A services. Current plans to revise the EU Procurement rules include removing the category of Part B services and raising the threshold to 500,000 Euros.

We have been asking the Government to oppose reforms to European Union Procurement Rules including plans to remove the category of Part B services, which will leave placements for vulnerable children and young people open to the tendering process. Many placements for children with high needs will exceed the proposed new threshold of 500,000 Euros and will fall under full EU Procurement rules.

About us

The National Association of Independent Schools and Non-Maintained Special Schools (NASS) is a membership organisation catering for approximately 6,000 very vulnerable children and young people in over 210 schools and organisations. It provides information, support and training to its members to advance the education of children and young people with SEN.

The Nationwide Association of Fostering Providers is the voice of the independent and voluntary fostering sector for children and young people. It promotes high standards of professional and business practice. There are 61 IFPs currently in membership, caring for approximately. 10,000 young people (about 75% of young people in the independent fostering sector).

The Independent Children’s Homes Association (ICHA) is the voice of independent providers of child care services and resources for children and young people. We are a not for profit Association, representing professionals who have chosen to work in the independent sector. Membership is rapidly expanding standing currently at 92 member organisations, 469 children’s homes and more than 1,500 placements.

January 2013

Prepared 18th July 2013