Sustainable Procurement and Commissioning - overview

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Sustainable Procurement and Commissioning -
overview

• Elizabeth Cox Josh Ryan-Collins
• Whole Life Costing Working Group
• 7th October 2008

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Plan for the day

• 11.00 Introductions
• 11.10 Overview of nef sustainable procurement
  work (Josh)
• 12.10 CAA response (Liz)
• 12.45 Lunch
• 1.30 Valuing SROI (Eilis)
• 2.00 Discussion/Summary

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Defining VfM

• Value for money is defined as the optimum
  combination of whole-of-life costs and quality
  (or fitness for purpose) of the good or service
  to meet the users requirement. Value for money
  is not the choice of goods and services based on
  the lowest cost bid.
• HM Treasury (2006) Value for money guidance,
  p.7. 13 August 2008
• In principle, any appraisal should take account
  of all benefits to the UK. This means that, as
  well as taking into account the direct effects of
  interventions, the wider effects on other areas
  of the economy should also be considered.
• HM Treasury (2003) Green Book, p.2. 25 August
  2008
• Wider social and environmental costs and benefits
  for which there is no market price also need to
  be brought into any assessment. They will often
  be more difficult to assess but are often
  important and should not be ignored simply
  because they cannot easily be costed.
• Ibid p.19.

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Challenges for procurement officers

• Narrow interpretation of Gershon VfM
• Cashable v non-cashable
• Price gt whole life costing
• Silos - Information on budgets and budget holders
• Aggregation
• But remember you are free to determine what you
  are buying you can contract for the
  construction of a sports hall or you can
  contract for the construction of a community
  centre and the regeneration of the community

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Value for Money narrow and real versions
coproduction
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Activities, outputs and outcomes

• Activities
• The intervention provided. E.g. a training
  course.
• Outputs
• Direct and tangible products from the activity
  for example the number of people trained, or the
  number of computers recycled.
• Outcomes
• Changes that occur for stakeholders as a result
  of the activity for example, a new job, improved
  quality of life or increased community cohesion.
• Both hard and soft outcomes can, and should,
  be valued

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How to procure locally1. Sustainable
Commissioning model
1. Activity 2. Output 3. Service level outcomes 4. Camden Community outcomes social economic environment 5. Value Quantitative Qualitative Monetizeable Where value accrues To Service Camden wide central government
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Two ways of seeing value St James House
social firm
Activity Output Service level outcome Camden Community outcome Value
Designs and prints stationary Recycles paper Provides training, supported employment, therapeutic support and paid work to people recovering from mental health problems in Camden Council stationary No. hours of training, supported employment, therapeutic support paid work High quality stationary and recycled paper Improved mental health Local jobs created Reduced Waste Reduced worklessness economic inactivity Increasing no. of people with mental problems into work staying in work More vulnerable adults living independently No. local jobs (supply chain monitoring) Landfill Savings Preventative savings Costs of tenancy failure 2,000 Council staffed hostel 484 per week local authority group home 202 Complex need placements - 1,200 per week Incapacity benefit 4,379 per claimant per year.
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Tracking outcomes Outcomes Star
www.homelessoutcomes.org.uk
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Relating savings to outcomes star
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Camden Community Strategy

• increase local business activity
• increasing no. of disabled people people with
  mental problems into work staying in work
• sustain local economic services such as
  post-offices
• Reduce energy usage

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Islington Community Strategy

• Explore new ways of engaging with local
  businesses (p30)
• Develop initiatives to tackle and adapt to the
  impact of climate change and raise awareness of
  the issues (p30)
• Reduce energy usage, reduce waste and promote
  walking and cycling (p30)

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National Indicators

• NI 152 Working age people on out of work benefits
• NI 166 Average earnings of employees in the area
• NI 171 VAT registration rate
• NI 172 VAT registered businesses in the area
  showing growth

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The local multiplier (LM3) effect

• Construction Norfolk district council
• 1 Local firm 2 Non-local firm
• Round 1 72,000 120,000
• Round 2 57,600 20,400
• Round 3 24,980 6,760
• Total 154,580 147,160
• LM3 2.15 1.23

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What is co-production

• Produce means - to make something or bring
  something into existence
• Co means - together with
• in relation to services
• active relationship between staff and service
  users as co-workers
• in relation to communities
• engaging the assets that exist within communities
  to grow the core economy

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What is co-production

• Investing in strategies that develop the
  emotional intelligence and capacity of local
  communities
• Devolving real responsibility, leadership and
  authority to users, and encouraging
  self-organisation rather than direction from
  above
• Offering participants a range of incentives which
  help to embed the key elements of reciprocity and
  mutuality

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What isnt co-production
Service users involvement in assessing services
Service user involvement in service design
Representation on service boards and panels
Service user consultation
Informing people who use services
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What is co-production
Professional designed
Traditional services
Expert Patient Programme
Professional delivered
Service user delivered
User self-help group
Service user designed
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Reviewing Roles
Professionals as sole service planner Service users/ community professionals as co-planners No professional input into service planning
Professionals as sole service delivers Traditional professional service provision Professional service provision - users and communities involved in planning and design
Professionals/ users/ communities as co-deliverers User co-delivery of professionally designed services Full user/ professional/ community co-production User/ community delivery of services with little formal/ professional planning or design
Users/ communities as sole deliverers User/ community delivery of professionally planned services User/ community delivery of co-planned or co-designed services Self-organised community provision
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What is co-production

• Reducing or blurring the distinction between
  those who deliver and those who receive services,
  by reconfiguring the ways in which services are
  developed and delivered services can be most
  effective when people get to act in both roles
  as givers as well as receivers
• Allowing public service agencies to become
  catalysts and facilitators rather than simply
  providers

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Getting impact in to the procurement process
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Ask the right questions

• What role would you envisage for service users
  in the development and delivery of your service?
• How does your service identify and mobilise
  service users strengths?
• How would the contribution of service users,
  carers, family, peer group, neighbours and the
  wider community be measured or rewarded?

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Guiding principles

• Recognising people as assets
• Valuing work differently
• Promoting reciprocity
• Building social networks

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How to do it Community Benefit Clauses

• "You can say in a contract that x of jobs must
  go to the long-term unemployed, or new entrants
  to the labour market, or people needing
  vocational training. But you can't say that jobs
  must go to local people. That is the key In
  reality, most - if not all - the jobs will go to
  local people or those from the surrounding area.
• Mark Cook, Anthony Collins Solicitors

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Raploch Urban Regeneration Company

• Renewing deprived outer-city estate in Stirling
• Demolishing 450 houses and building 900 new
  homes, new roads public squares
• 10 of jobs to go to local people, with a target
  of 225 jobs
• Contractors legally-bound to provide 5
  apprenticeships, 10 jobs for semi-skilled
  operatives 10 training places per year

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Sustainable Communities Act

• Local authorities are charged under the
  Sustainable Communities Act to find new ways to
  support local enterprises to develop their
  capacity to provide sub-regional economic growth
  in respect to
• Local jobs and production within a 30 mile area
• More local and organic food
• Green energy within a 50 mile regional radius
• Provision of local services (eg. health, housing,
  banking, public eating places, etc.)
• Measures to increase mutual aid and community
  projects
• Measures to increase community health and
  well-being.

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www.procurementcupboard.org.uk
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Further information

• josh.ryan-collins_at_neweconomics.org
• www.neweconomics.org.uk
• Fools Gold How the 2012 Olympics is selling East
  London short, and a 10 point plan for a more
  positive local legacy
• Unintended Consequences How the efficiency
  agenda erodes public services and a new public
  benefit model to restore them
• Public Spending for Public Benefit
• Plugging the Leaks The Money Trail
• A Better Return Setting the foundations for
  intelligent commissioning to achieve value for
  money IDeA OTS Third Sector Commissioning
  Programme
• Coproduction Manifesto