How a local authority should commission a public service has a simple answer: by identifying the ‘best value’ service.
However, for two decades a misconception has prevailed that promotes public procurement, internal protocol and prescribed procedure, to an extent where the paramount focus on purpose can become distorted.
The scapegoat for this, until recently, was the European Public Procurement regime. A tenacious myth became entrenched that the remoteness and impersonality of European law had imposed burdensome obligations that inhibited, or even prohibited, commissioning good sense.
However, in reality, the opposite is the case. The regulations are, by design, enabling, permissive and flexible. In fact the true villain is domestic, bureaucratic institutionalism. This has allowed procurement to bloat into a statist industry, distorting and swamping clarity of purpose in public services.
So how, instead, can commissioners embrace the art of the possible in public procurement?
A great opportunity was created by the introduction of ‘the light touch regime’ to the EU regulations in 2015. This is a core application of the proportionality principle, under which a range of social, personal and community services are placed outside the mainstream procedural requirements of procurement.
It extends the general exemption from prescriptive process to all service contracts up to €750,000 - and it removes all prescriptive process apart from notice obligations for contracts above that figure.
Complex process is not necessary. As Locality, the national membership network for community organisations, has been arguing through its Keep it Local campaign, there is full discretion for councils to “commission services simply and collaboratively so they are ‘local by default’”.
Indeed the insolvencies of the large commercial providers, Carillion and Interserve, have demonstrated the need for more enlightened commissioning. Commissioning should not assume big and commercial are best and not preclude engagement of a community provider.
In recent decades the commissioner’s function has been seen as detached, dispassionate, lowest-price purchasing. However, public services are not delivered in pure market conditions, where demand driven price/quality elasticity is the determining factor. They are tax-funded services meeting legally and ethically required social needs. That obviously requires a budget and service specification equation, but not a lowest price imperative.
'Public services are not the sole preserve of public authorities .. it is the community who have the direct stakeholder interest ... so public services must be developed and delivered in consultation with, at the first level, service users'
What’s more, public services are not the sole preserve of public authorities.
It is the community who have the direct stakeholder interest. So public services must be developed and delivered in consultation with, at the first level, service users - and at the second level, those that closely engage with and so may legitimately represent service users. The first stage of any service commissioning process should be such local collaborative consultation and the conclusions of such community consultation should inform every later stage, maximising community co-design and co-delivery.
All of this may be actively facilitated by the commissioner. The 2015 procurement reforms and parallel reforms of the state aid rules, which regulate public sector grants and other subsidies, emphasised that the public law rules may be used to promote social policy (not just to ensure fair competition).
Fundamentally, public services developed and delivered with such collaboration would naturally focus on meeting the big challenges faced by local public services: achieving cross-service integration, cost-saving prevention, and continuous improvement. Current market models, however, set-up the powerful counter-forces of: segregated budget-lines; short-term cost-cutting; and limited-duration service commitments.
Some local authorities are already moving in this direction. Prominent examples include; Wigan’s community covenant; Leicestershire’s pioneering Innovation Partnership; Durham’s systematic community asset transfer programme; Oldham’s and Croydon’s systematic, multi-level social value policies; Preston’s and Bristol’s local economy promotion; and the Co-operative Councils initiative.
Overall this movement is a corrective to the market/statist dichotomy in public services. It is elevating social value to the primary factor through which price and quality may be assessed and balanced in commissioning.
And it is highlighting how social purpose, social enterprise and social impact may, relatively simply, be energised through local community partnership.
