Leading by Standing Back:
seven habits of more effective
commissioners
Matthew Pike
March 28th 2012
Letting Go: Holding On
"..the skill we lack …is…understanding how to
let go, to get somebody else to deliver where we
specify the results we are after, then work with
those suppliers.. to make sure the incentive
structure is right and we are all working
together to deliver better public services in the
end."
Gus O’Donnell – outgoing Head of Her Majesty’s
Civil Service
What new capabilities are required?
i) Impact intelligence
ii) Value for money appraisal
iii) Supply chain ‘choreography’
iv) Evidence-based practice
v) Habits of innovation
vi) Social entrepreneurship
vii) Navigating social finance markets
“Commissioning is the strategic activity of identifying need, allocating
resources and procuring a provider to best meet that need, within
available means.”
“Commissioning is all about the most effective and efficient way of
using all the available resources to improve the outcomes for
…………………..”
i) Skillfull Impact Measurement
• Longstanding rhetoric of outcomes and results
• Most LA’s now have clear high level outcome
statements and a sea of data
• Provider capacity is weak and the field of impact
reporting has been immature and fragmented –
until now
• Moves to results-based funding and the fiscal
crisis have increased the pace and the stakes
• The new Inspiring Impact alliance will help build
capacity and awareness
ResultsMark
• A new service to help build impact reporting and analytic capacity for
Local Authorities and providers
• Shared measures, evidence gathering tools, data sources, reporting
standards, use of open data – available free to providers
• Discounted access to the Views reporting system
• Three tiers of reporting: Bronze, Silver, Gold – most providers will take two
years to get to Gold. An increasing number will gain a formal impact
rating.
• Supports benchmarking, informed commissioning, as well as the efficient
sharing of best practice
• Local Authorities can add outcome measures to new contracts, access
intelligence about the local and wider supplier market and stream-line
reporting in the future – with annual reports submitted on-line*
* Quality assured, verified, made consistent with open data standards, rated for information
quality, evidence and outcomes achieved and subjected to both routine and bespoke value
for money analysis
Views
• Impact reporting made easy
• A simple, flexible reporting system that is ideal for smallmedium providers in particular
• The Views dashboard gives supply chain managers and
commissioners real-time reporting on outputs and
outcomes
• Builds in all the metrics, standards and tools developed for
ResultsMark
• Views is a social enterprise, created by research mutual
Substance
• £50 a month upwards per organisation
• www.views.coop
Results-based commissioning
• Models of results-based commissioning are fast becoming the norm
• Examples include Work Programme, Ex-offenders, Families with complex
needs
• Most schemes have pulled back from pure results funding to include an
element of payment on account due to the cost of capital / risk involved.
Results based contracting is greatly disadvantaging small and even
medium-sized not for profits
• Alternative models to pure results based contracting include cutting the
worst performers each year or offering a performance bonus component
on successful completion.
• Requires ability to track impact of services in real time, verify outcomes,
learn from success achieved, pay the right price for outcomes delivered,
understand risk and monetise added value
ii) Business appraisal based on impact
intelligence
• Which are the cheapest and most expensive providers of similar
services?
• Which organisations are targeting what outcomes?
• Which services target which target groups?
• Which services deliver the greatest outcomes?
• Which organisations are able to report on their social impact?
• How does current in-house provision compare to the wider market?
• What are the hall marks of more effective providers?
• Which services offer the greatest Social Return on Investment?
• Which providers are most likely to deliver high impact and returns
in the future?
• Overall which providers offer the great social impact for every £
spent?
Cutting, Keeping, Growing
• Cut what does harm, is poorly targeted, delivers
poor results or represents poor value for money
• Keep what delivers results at or beyond the norm
and spread awareness and use of better practice
• Grow what delivers at the edge of the ‘efficient
frontier’
• 50% of Manchester’s cost base results from the
failures of previous interventions, so there is
scope for major long term cost saving
iii) ‘Choreographing’ new supply
chains
• Most challenging social problems are
characterised by complex and embedded risk
factors
• Single service solutions are unlikely to work
• Services need to address multiple factors in a
coherent and comprehensive way
Not for profit supply chains
Local providers have great insight into what works best for different
target groups. They are also more likely to find ways of working
together to offer a coherent service than Local Authorities.
•
West London is one example of c 60 NFP consortia nationwide
• LA awards contract to NFP supply chain managers – either existing
organisations or special purpose vehicles
– Third sector + consortia / supply chains
– Joint development of integrated care / support pathway
•
•
•
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Manager & board agree on resource allocation
Peer learning and benchmarking across supply chain
Real time accountability for delivery of outcomes
Needs good capacity, especially in order to be fully accountable for
outcomes achieved
Community management of hubs
and services
• Some specialist and highly localised services / amenities can
be best passed over to local control and management
•
•
•
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Development Trusts and Settlements,
New model libraries
Advice centres,
Parks etc
• Opportunity to remodel estates & support asset transfer to
community based organisations
• Co-location of services supports a financially sustainable model
• Shift service focus away from crisis management into DIY and
prevention
Need for investment, capacity / shared services, innovation in
business models
iv) Evidence-based practice : doing
more of what works better
• Commissioning is more than ever knowledge work
• Services such as ResultsMark and Views help to build
up a more nuanced picture of what works better (for
whom and where)
• A growing library of 200+ evidence-based interventions
that have been evaluated to the highest standards
• Dartington Social Research Unit work on impact
modelling – predicting likely savings to different
agencies, year by year
• In all cases the key is fidelity to known critical success
factors
v) Building a culture of innovation
• Local Authorities should allocate some capital in every
funding portfolio to innovation (hedged by investment
in evidence-based programmes)
• Real time impact reporting enables Local Authorities to
invest in early prototypes of new social solutions, kill
off those that don’t deliver (many won’t) and scale the
few that do
• Innovation is fuelled by putting money behind
outcomes
• Most successful innovation comes through opening out
the value chain, supporting creative dialogue and
engaging front-line service users
vi) Acting as Social Entrepreneurs
• Local Authorities need to incubate third party
innovation, but occasionally they also need to
pioneer change themselves - especially given
their special ability to achieve impact on scale
• Examples include:
- Spin-out companies and JVs
- Access to financial services
- Bulk-buy of energy and other utilities alongside
low-income families
vii) Accessing social finance markets
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Preventing future harm is the best way of achieving medium – long term cost
savings.
Social Impact Bonds and related approaches offer potential to drive long term cost
savings
Special Purpose Vehicles can take some forms of investment off the local balance
sheet
There are similar opportunities to encourage investment in estate redevelopment
and rationalisation
But there are big capacity issues: needs an ability to model, monetise and track
outcomes relevant to different funders, track and manage fidelity to known critical
success factors, deliver on sufficient scale to achieve cashable savings, with a
sufficiently comprehensive care and support pathway to avoid the target group
falling behind again in the future. Finance remains over-priced, targeting equitylike returns (reflecting both poor structure and an inadequate understanding of
risk).
Medium term we can at least hope for a liberation of Local Authority financing
options
Matthew Pike
matthew.pike529@gmail.com
I am currently recruiting Local Authority
partners for ResultsMark capacity building