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Chapter 9: Commissioning reform—unlocking the potential of charities and the private sector

“I would never have viewed myself as vulnerable, but two hours after the announcement was made [to lock down] on that Monday evening I got a text saying [that I had to shield] and I really had a big shock. That hit me really hard because I am active, I do a lot of things, and suddenly I was not able to do anything at all … I began to panic. I live alone, I am single, so it was very hard. It hit me really hard within the first 24, 48 hours, realising, ‘This is it. I am on my own.’

“However, with Age UK Berkshire and our local council I was not alone, because not many days passed before I started getting phone calls to ask, ‘Are you all right? Do you need anything? Do you need a food parcel?’ The first time I got a food parcel on my doorstep I just cried. I thought, ‘Someone has remembered me. I am not just a number, I am a real person’ … Somebody called me each week or a couple of times a week just to find out how I was, because they knew I was struggling.”

176.Tamsin Phipps told us that because her local Age UK stepped in to work with her local council to support her, she “survived lockdown”.179

177.Many charities and businesses adapted quickly to the challenges of COVID-19, working alongside councils and other public bodies to deliver services to people like Tamsin. They were able to develop innovations in service delivery because the Government relaxed the regulatory framework governing the relationship between public bodies and other organisations. In this chapter we consider how future public service commissioning processes might take into account the important role played by charities and businesses and the need for sustainable funding settlements for third-sector organisations delivering public services.

Innovation in the charity and private sectors

178.Witnesses told us about the significant pressures that COVID-19 had placed on charities. Since the beginning of the outbreak, charities have faced both a surge in demand for their services and a significant drop in their revenue.180 Many organisations reported that their fundraising income had reduced substantially; the first national lockdown and subsequent restrictions curbed the operation of charity shops, street collections and fundraising events and led to reduced donations by the public.181

179.However, we also heard about the many innovations that charities developed in response to the pandemic. The Rainbow Trust Children’s Charity specialises in providing support to families across the country with children who have life-threatening or life-limiting illnesses. When outpatient and routine appointments were cancelled, the charity relieved some of the pressure on the NHS by providing hospital transport and supplying medicines to families in self-isolation. The Lead Nurse for Neonatal Palliative Care in London, Alex Mancini, reported that the “flexibility” of the charity had been “invaluable” in supporting families and clinical teams.182

180.The private sector helped public services extend their reach during the first lockdown. In April 2020, at the height of the pandemic, the technology company Advanced helped health professionals who were in self-isolation to continue to take calls from NHS 111—a free-to-call non-emergency helpline that offers medical advice—at a time when the service was struggling to cope with rising demand. Advanced also built the 119 line, which allowed GPs to teleconference with patients so that they could continue to access primary care.183

New models of procurement: working with charities and businesses

181.Commissioning is the process which regulates how public bodies such as local authorities or Clinical Commissioning Groups (CCGs) procure services from public service providers, including charities and businesses.

182.On 20 March 2020 the Cabinet Office issued guidance for public service commissioners. The guidance allowed commissioners to procure services based on how they would benefit a community. Previously, the guidance had emphasised value for money.184 Commissioners could now focus on social value rather than competitive tendering, meaning that local authorities could draw on the voluntary and community sectors and the surge in volunteers. Many witnesses welcomed how the guidance had relaxed key performance indicators (KPIs)—quantifiable measurements used to gauge an organisation’s performance—which permitted grants to be made without strict conditions attached, and enabled less onerous procurement processes.185 According to the Lloyds Bank Foundation, an independent charitable trust, and Josh Hardie of the CBI, this greater flexibility enabled businesses and charities to adapt their services to address local needs.186

183.The National Council for Voluntary Organisations and Kathy Evans, Chief Executive of Children England, told us that the new guidance had empowered commissioning bodies to try new ways of collaborating with the voluntary sector.187 Andrew McCartan, Commissioned Services Manager at Wirral Council, said: “Traditionally, we’ve been a very KPI-, performance-driven organisation. During the crisis, we’ve seen organisations do things well without this level of process and a greater degree of trust and collaboration.”188 A disability charity in Cornwall described how its targets had been altered to create greater social value: “We are working with our partners on a Council commissioned ‘Inclusion Matters’ contract and have changed elements of it to enable us to respond with helping people with shopping, collecting prescriptions.”189

184.Many witnesses called for the Cabinet Office guidance to extend beyond the pandemic in order to maintain this flexibility.190 Children England warned the Government not to “return to previous commissioning and contracting practice” and instead use the experience of COVID-19 to develop closer partnerships between commissioners and the third sector.191 Paul Streets, Chief Executive of Lloyds Bank Foundation, argued that guidance should distinguish between heavily regulated statutory services, where there was “an absolute need for a regulated service that sets standards that give a degree of consistency and protection to people”, such as adult social care, and non-statutory services, such as those for homeless people, where services should have more freedom to innovate to meet local needs.192 The NCVO contended that to “support engagement of the voluntary sector and to enable it to play its full role in the delivery of services in the aftermath of the pandemic, sustainable grant funding” was “essential”.193

185.Josh Hardie stated that the ways to build a “collaborative and social value approach” to partnership working between businesses and public services, as opposed to focusing on what could be delivered at the “lowest cost”, had been set out in The outsourcing playbook,194 Cabinet Office commissioning guidance published in 2019. Since then, the pandemic had helped to drive “progress” in partnership working on the ground. Mr Hardie argued that it was now important to “identify and value the changes we made and really push them through to the other side, because it would be a huge wasted opportunity if we did not”.195 The Shaw Trust, a charity that helps people with complex needs improve their skills and find employment, highlighted the forthcoming procurement green paper as an opportunity for the Government to formalise lessons learnt from COVID-19.196

186.The Cabinet Office showed admirable flexibility during the pandemic in issuing new guidance to commissioners which put greater emphasis on the social value that commissioning can create and gave greater autonomy to frontline service providers.

187.The Cabinet Office should now update The outsourcing playbook to reflect the new ways in which businesses and charities delivered services during the pandemic, and provide commissioners with best-practice guidance to encourage joint working with the private and third sector. Any new guidance for commissioners must retain the existing focus on social value, partnership working and sustainable grant funding.

188.Once updated, The outsourcing playbook should be incorporated into the forthcoming green paper on procurement. Its guidance should apply across the public sector to ensure that public service commissioners prioritise social value when contracting services from charities and businesses.

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