COALITION OF CARE AND SUPPORT PROVIDERS IN SCOTLAND ... · In October 2013, the Scottish Government...

COALITION OF CARE AND SUPPORT PROVIDERS IN SCOTLAND

Procurement and tendering for care and support: Experiences from the third sectorReport of a survey conducted by CCPS

cpcsCOALITION OF CARE AND SUPPORT PROVIDERS

I N S C O T L A N D

Contents

Introduction .................................................................................................................. 3

About this report ..................................................................................................... 3

About CCPS ............................................................................................................. 4

Procurement of care and support: a brief summary ...................................... 4

The CCPS survey: method and approach ......................................................... 5

Survey respondents ................................................................................................ 6

Survey findings .............................................................................................................. 7

Part 1: Scale and volume of procurement activity ........................................... 7

Volume of tendering ......................................................................................... 7

Contract value ................................................................................................... 8

Contract type ..................................................................................................... 9

Part 2: Experiences of the procurement process ............................................ 9

Notification and involvement of providers .................................................. 9

Notification and involvement of service users .......................................... 10

Risk/benefit analysis of procurement activity ............................................11

Commissioning strategies ..............................................................................11

Post-contract award variation to price ...................................................... 12

Feedback from tenders .................................................................................. 13

TUPE .................................................................................................................. 13

Decisions not to submit tenders .................................................................. 14

Part 3: Providers’ perceptions of trends in procurement practice ............. 15

Commissioning for outcomes ..................................................................... 16

Framework agreements ................................................................................. 16

Generic vs specialist contracts ..................................................................... 18

Procurement capability ................................................................................. .19

Self Directed Support (SDS) .......................................................................... 19

Tender evaluation criteria ..............................................................................20

Proportionality .................................................................................................22

Best practice .....................................................................................................23

Alternatives to tendering ...............................................................................24

Analysis and discussion .............................................................................................26

Key issues to consider ......................................................................................... 27

Scale and risks of the tendering ‘industry’ for care and support ........... 27

Procurement capability ..................................................................................28

Unintended consequences arising from tendering .................................29

Impact of framework agreements ...............................................................30

Procurement in a strategic context............................................................. 31

Conclusions and recommendations ......................................................................32

Endnotes ......................................................................................................................35

Click on Contents list

to navigate document

Procurement and tendering for care and support: Experiences from the third sector

3

Introduction

About this reportThis report aims to provide an up-to-date picture of the way in which procurement and tendering for care and support is experienced by third sector service providers. In particular, it looks at the extent to which both the Scottish Government/COSLA 2010 guidance on procurement for care and support services1 and the Social Care (Self Directed Support) (Scotland) Act 20132 are influencing procurement policy and practice on the ground.

The material contained in the report is drawn principally from a major national survey of providers conducted by CCPS during the summer and autumn of 2013. The quotations featured throughout the report have been taken both from provider responses to the survey and from discussions at a focus group of senior managers in provider organisations, convened to discuss the survey findings. This material is supplemented by information gathered by CCPS from other sources, including Invitations to Tender (ITTs) issued by individual contracting authorities and searches conducted using the Public Contracts Scotland3

online portal.

CCPS4 is grateful to all those who participated in the survey and focus group, and/or otherwise provided information for this report; and to Mike Martin, freelance consultant, who was engaged by CCPS to conduct an analysis of survey responses, follow up issues with individual respondents and convene the focus group.

http://www.scotland.gov.uk/Publications/2010/09/21100130/0


http://www.legislation.gov.uk/asp/2013/1/contents/enacted


http://www.publiccontractsscotland.gov.uk/

http://www.ccpscotland.org


4

About CCPSCCPS is the Coalition of Care and Support Providers in Scotland. Its membership comprises more than 70 of the most substantial providers of care and support in Scotland’s third or voluntary sector, supporting approximately 350,000 people and their families, employing around 43,000 staff and managing a combined total income of over £1.3bn, of which an average 78% per organisation relates to activity funded by the public purse.

CCPS members provide services across the spectrum of care and support, including services for children and families; older people; adults with physical and/or learning disabilities; and people facing a range of challenges in their lives including mental health problems, addictions and involvement in the criminal justice system.

A significant proportion of these services are provided within the terms of public contracts awarded by local authorities following a procurement exercise.

Procurement of care and support: a brief summarySince the introduction of the NHS and Community Care Act 1990, competitive tendering has been adopted by local authorities as a key technique in the commissioning process for community care. A similar approach has subsequently been taken to services for children and families, homeless people and people involved in the criminal justice system.

The scale and volume of competitive tendering for care and support have increased considerably since 2006. This has been driven by two key factors:

• ThePublicContracts(Scotland)Regulations2006(revisedandupdated 2012), which give effect in Scots Law to EU ProcurementDirective 2004/18/CE and which have been interpreted as requiringauthorities to advertise and compete contracts for care andsupport services, unless specific circumstances apply (see ScottishProcurement Policy Note SPPN 10/20085)

• ThePublic Procurement Reform Programme6 initiated by the (then)Scottish Executive with the publication of the McLelland report, alsoin 2006, which identified the need for significant improvements tothe way public bodies purchase goods and services from externalsuppliers.

CCPS first began to highlight provider concerns about the impact of this acceleration of procurement activity with the publication of a position statement7 in 2007. This was followed in 2008 by the findings of a national survey8 of providers’ experiences of tendering, and in 2009 by the publication of research conducted jointly with the University of Strathclyde looking at the specific impact of re-tendering on the third sector workforce9.

These initiatives provided evidence that competitive tendering (particularly re-tendering) of contracts for care and support can have a

http://www.scotland.gov.uk/Resource/Doc/116601/0065310.pdf


http://www.scotland.gov.uk/Topics/Government/Procurement/about/Review

http://www.ccpscotland.org/wp-content/uploads/2014/03/Tendering-CCPS.pdf

http://www.ccpscotland.org/wp-content/uploads/2014/03/retenderingsurveyfinal.pdf

http://www.ccpscotland.org/wp-content/uploads/2014/03/retenderingsurveyfinal.pdf

http://www.ccpscotland.org/wp-content/uploads/2014/01/AGatheringStorm.pdf

http://www.ccpscotland.org/wp-content/uploads/2014/01/AGatheringStorm.pdf


5

major impact on the quality, continuity and stability of service provision; on workforce planning, development, pay, terms and conditions; and on the wellbeing of service users and their families. This arises principally from tension between the respective policy imperatives of procurement reform on the one hand, in which care and support contracts are viewed primarily as business opportunities, and social care on the other, where the priority is greater involvement and control for individuals in the design and delivery of support that is personalised to them and, increasingly, strategic partnerships with service providers.

Evidence produced by CCPS, combined with other initiatives in this area (including an inquiry10 by the Scottish Parliament Local Government and Communities Committee into the procurement of home care services in 2009) led to the development of detailed guidance for public bodies in 2010 (“the 2010 guidance”) as noted above. During the 18 months or so that it took to produce the 2010 guidance, providers observed a slackening-off of ITTs as authorities either dropped or postponed their plans to tender, pending publication; this slackening-off may also have been prompted by the high-profile collapse of a major city council care and support tender in 2009.

Following publication of the guidance, tendering activity picked up pace again, not least because of the financial pressure applied to the public sector as a result of the economic downturn and the subsequent impact on local government budgets. In 2012 Audit Scotland published its report Commissioning Social Care11, which pointed to continuing problems with commissioning and procurement of care and support.

In October 2013, the Scottish Government introduced the Procurement Reform Bill12 to the Scottish Parliament. CCPS believes that this legislation has the potential to address many of the key outstanding issues for care and support procurement, and this report has been produced at least partly to inform the legislative process in this respect.

At the same time, the European Directives on Public Procurement have been subject to a period of major review and revision. The new Directive, due to be approved by the European Parliament in 2014, recognises and addresses many of the key issues for care and support services and excludes such contracts from the full application of the Directive.

The CCPS survey: method and approachAn online survey questionnaire was designed by CCPS to elicit information based on care and support providers’ experiences of procurement in the three years 2010-2013. The survey sought both factual information relating to the number, type and range of tenders over the period along with experiential impressions and views relating to processes and outcomes. It was distributed to the CCPS membership and to wider provider networks including the Housing Support Enabling Unit and the Providers & Personalisation Programme.

http://archive.scottish.parliament.uk/s3/committees/lgc/inquiries/HomeCareServices/index.htm

http://www.scotland.gov.uk/Topics/Government/Procurement/policy/ProcurementReform

http://www.audit-scotland.gov.uk/media/article.php?id=194


6

Following analysis of the survey responses by a consultant engaged by CCPS, the results of the survey were tested and explored through a focus group of experienced senior managers with responsibility for tender submissions from a range of provider organisations. This session, together with individual conversations held by the consultant with providers, assisted in the interpretation of the survey findings and with the development of the conclusions and recommendations set out in this report.

Survey respondentsFifty-two third sector organisations involved in providing care and support services submitted responses to the survey. Forty-five complete responses were submitted; the remainder were partial responses. The percentages identified in the survey findings relate to the total number of respondents who answered the specific question in each case.

Of those providers responding to the survey:

• 79%providesupportforadultsand/orolderpeople

• 26%providesupportforchildrenandyoungpeople

• 59%providesupportforpeoplewithlearningdisabilities

• 39%providesupportforpeoplewithmentalhealthneeds

• 37%providesupportforpeoplewithaphysicaldisability

• 15%providesupportforpeopleinvolvedinthecriminaljusticesystem

• 11%providesupportforpeoplewithsensoryimpairment

• 11%providesupportforpeopleaffectedbysubstancemisuse

• 7%providesupportforpeoplewithdementia.

This is broadly representative of the CCPS membership, and indeed of the third sector’s ‘market share’ in care and support. (NB. Several organisations provide support to a range of groups, thus the total adds up to more than 100%).

The total combined income of the providers responding to the survey is just over £742m. Based on the income profile of its members, CCPS estimates that an average of 78% of income, per provider organisation, relates to publicly-funded services, indicating that this report is based on the experiences of organisations that provide around £579m of publicly-funded services.

According to the Scottish Government Procurement Information Hub13, the total procurement spend (ie. excluding services provided directly by public bodies) on social care in 2011-12 was just under £1.4bn. Although this figure may not reflect the full scope of funding for third and independent sector care and support services (because some spend may be logged with the Hub under alternative category headings) the services provided by respondents to this survey are still likely to represent a very significant proportion of total procurement spend.

The survey covers the whole of Scotland, with at least one respondent working in each local authority area (and with 27% of respondents working in all 32 areas).

http://www.scotland.gov.uk/Topics/Government/Procurement/eCommerce/ScottishProcurementInformationHub


7

Survey findings

Part 1: Scale and volume of procurement activityVolume of tenderingThe survey sought providers’ views on their experiences of tendering activity during the three years 2010-13. It has proved extremely difficult to identify accurate figures for the overall volume of tendering activity during that time.

Many (but not all) public contracts for care and support services are posted on the Public Contracts Scotland14 (PCS) website. CCPS has been tracking tendering activity via contract notices posted on PCS since August 2011. We have identified a total of 76 separate contracts or framework agreements for care and support posted by local authorities, and 7 by NHS Boards, during this period. Bearing in mind that not all contracting authorities use this site to advertise contracts, and that this time period represents only just over half the period examined in this survey, the total number of contracts advertised between 2010-13 is likely to be very significantly in excess of this figure.

The survey asked respondents to list all the tenders with which they themselves had engaged over the three-year period. Not all providers were able to do this: some do not keep relevant records centrally, and were not able to free up administrative capacity to gather the required information from their regional and local offices before the closing date for the survey.

Responses from providers that were able to provide a comprehensive list of the tenders with which they had engaged (81% of total respondents) indicate that between them, these providers were active in either considering or preparing a total of 376 separate tender submissions over the period (some of them for the same contracts; and not all of them submitted, as this report will go on to discuss). Again, given that 19% of respondents did not (or could not) provide comprehensive information about their tendering activity, this is likely to be a considerable underestimate of total submissions considered or prepared by all survey respondents.

Responses suggest a very mixed picture of activity per provider: two providers for example reported engagement with only one tender over the period, whilst four listed more than 25 tenders (one of them noting that “this is just a sample of the tenders we participated in from 2010-13”). Most of the respondents that listed the tenders in which they participated reported a total of between 5 and 8 tenders over the period although again, a number of them noted that this was not exhaustive.

In general, the organisations reporting higher levels of tender activity were those providing what we might term ‘adult community care’, that is support for adults with learning disabilities, mental health problems, physical disabilities and/or sensory impairment, or a combination of these.

By contrast, much lower levels of tendering activity were reported by organisations providing children’s services, and by very specialist

http://www.publiccontractsscotland.gov.uk


8

providers that work only with specific ‘client groups’ for example those with dementia, autism or particular types of sensory impairment.

This aligns with the pattern of the notices posted on the PCS website, where only 12 of the 76 tenders (16%) identified by CCPS since August 2011 related to services for children and young people, and only 2 related to a ‘specialist’ service. The remainder were for broader areas of adult and older people’s care and support.

The great majority of tenders was issued by local authorities, although providers also listed tenders issued by Health Boards; the Department for Work and Pensions; the Scottish Government; the Scottish Prison Service; and Scotland Excel.

The pattern of tendering for care and support varies between local authorities, with some authorities issuing up to 9 tenders since CCPS began to monitor activity in August 2011, and others issuing none (or at least, not issuing them via PCS).

Contract valueIt was not possible to identify (nor to estimate) the total value of all the contracts tendered for by respondents in this survey. Neither is it possible to interrogate the Public Contracts Scotland portal with respect to contract value.

As noted above, total procurement spend on care and support in Scotland in 2011-12 was just under £1.4bn, although not all of this spend relates to contracts that have been competitively tendered (as discussed later in this report).

Discussion at the focus group indicated that service contracts won through tendering probably account for around half of all services provided by an organisation, with the remainder coming through the rolling forward of existing arrangements, additional work added to existing contracts or simply through work being requested and allocated, often at short notice in response to an urgent demand. One provider indicated that it had made a policy decision not to tender for services and all its work therefore came through alternative routes.

“There’s a lot that doesn’t go out to tender.”

This would suggest that there may be parallel procurement practices in many authorities, with planned and projected service situations being subject to tendering and re-tendering (often through a corporate procurement team) while urgent, emergency or less ‘predictable’ services are the subject of negotiation directly with service/care managers.

All providers at the focus group had experience of tendering for individual services with low contract values, as well as high-value and larger volume contracts.


9

Contract typeNinety-five per cent of those respondents who provided a list of specific tenders included tenders for new services on their list; 75% included re-tenders of existing service contracts; 77% included new framework agreements; 50% included ‘refreshes’ of existing framework agreements; and 24% included mini-competitions within a framework.

Part 2: Experiences of the procurement processThe survey asked providers to describe their experiences of the procurement process in a number of areas identified as problematic in earlier work by CCPS, including those that the 2010 guidance sought to address.

Notification and involvement of providers

“Public bodies should…recognise service providers’ contribution to achieving positive outcomes for service users;…be proactive in involving service providers in service design and the development of service specifications” (2010 guidance, para 6.23)

Survey respondents were asked whether, in circumstances where they were the existing service provider, they had received timely notification of an intention to re-tender.

• 72%ofrespondentsfelttheyhadreceivedtimelynotification

• 12%felttheyhadnot

• 16%sawitasamixedpicture.

“We had more than 6 months’ notice and discussion”

However when asked if they had been engaged by authorities in reviewing or designing service specifications prior to the issuing of a tender, providers were much less positive.

• Only2%ofrespondentsreportedthattheyhadbeenengagedinreviewing or designing service specifications

• 80%hadnotbeenengaged

• 18%saiditwasamixedpicture,suggestingthatinsomecasesin some authorities this did occur, but this was very much the exception rather than the rule.

“I get anxious that the energy’s being spent in the procurement process and not in the commissioning or service design. How do we re-imagine what [the authority is] already buying, to make people’s lives move forward and support change…if we could get involved at that stage with local authorities, it would make a huge difference.”


10

“Where it is happening, it feels tokenistic and it feels like we’ve got an awful lot to teach them about involvement and listening to people.”

“We were simply informed of the decision – the council is very sensitive about engaging with providers.”

“Funders generally base new service specifications on the existing service.”

“I went to a [tender meeting] and they said, okay, we’d like to talk to you, has anybody got any questions they’d like to discuss… but they hadn’t come with any questions about framing a specification, it was far too late in the process.”

Notification and involvement of service users

“The public body should communicate its intentions to all service users and carers…and should agree proposals for their involvement in the procurement process.” (2010 guidance para 9.2)

With regard to timely notification to service users and their families of intentions to re-tender their support, the situation seems less positive than it is for providers.

• Only12%ofrespondentsreportedthatserviceusersandfamilieswere generally given timely notification

• 46%reportedthatserviceusersandfamiliesdidnotgenerallyreceive timely notification

• 27%saiditwasamixedpicture

• 15%didnotknow.

“This never happens in addiction services.”

“I would suggest this is pretty uncommon.”

“It varies greatly from tender to tender.”

“On occasion, the authority has asked us to inform families for them.”

Respondents were asked whether, generally speaking, the views of the people they support(ed) were sought by authorities at any point prior to that support being re-tendered, either about their experience of receiving the service or their views on the procurement process.

• Only7%ofrespondentsindicatedthattheviewsofserviceuserswere sought

• 66%indicatedthattheywerenotsought


• 15%didnotknow.


11

“[There was] active involvement of service users and families in one service where the review of service and the decision to extend the contract was based on their feedback, measured outcomes as defined by individuals and the assessed good performance of the service.”

“Sometimes families seemed to be involved and aware, other times, it was very doubtful or non-existent”

Risk/benefit analysis of procurement activity

“Public bodies should analyse the benefits and risks to service users and service delivery of advertising the requirement and awarding the contract or framework agreement by competition.” (2010 guidance para 8.30)

Providers were asked whether, so far as they were aware, a risk/benefit assessment had been carried out prior to a decision to tender/retender a service.

• Only10%ofrespondentsreportedthat,sofarastheywereaware,arisk/benefit assessment had been carried out

• 34%indicatedthatithadnot


• 44%didnotknow.

Given the high level of “do not know” responses, it is not possible to assert that the 10% is an accurate view of the extent of compliance with this practice: however even if all the “Do not know” answers were to be placed into the “Yes” answer, that still indicates that a substantial volume of tenders may not be subject to any kind of risk/benefit analysis.

Commissioning strategies

“Public bodies should…place the procurement of services within the wider context of strategic commissioning;…[and] involve service providers in the development of local commissioning strategies.” (2010 guidance paras 2.2 and 6.23)

All local authorities and health boards should now have joint commissioning strategies in place, at least for older people’s services, and from 2015 this will be a statutory requirement for all adult care services (assuming the relevant provisions of the Public Bodies (Joint Working) (Scotland) Bill15, currently before the Scottish Parliament, are enacted).

Providers were asked to indicate whether, to their knowledge, tenders were conducted within the context of a commissioning strategy.

• 24%ofrespondentsindicatedthattenderswereconductedwithinthe context of a joint commissioning strategy

http://www.scottish.parliament.uk/help/63845.aspx



12

• 27%indicatedthattheywerenot


• 20%didnotknow.

Providers were also asked if they had been involved in the preparation of commissioning strategies.

• 33%indicatedtheyhadbeeninvolved

• 60%indicatedtheyhadnot

• 7%didnotknow.

“Some local authorities are attempting to involve providers in thinking about commissioning strategies…this should be highlighted as good practice.”

“I see a big disconnect between the tenders we see, what the specifications are, and the commissioning strategy: I don’t see a clear line of sight between the two. I might be asking too much, but I aspire to see a document that helps me say, I completely get how this fits in, this is part of the landscape of services they’d like to offer and this is why it’s here and why they’re bothering shopping for it.”

“One council has a 10-year commissioning strategy guiding all their tender exercises.”

“We assume such strategies exist but this is not generally relayed to potential providers.”

“[We are] involved in the sense of being present and engaged at consultations and forums. No evidence of impact being significant on these yet.”

Post contract award variation to priceSome providers have reported to CCPS, anecdotally, that some authorities seek to negotiate on (and reduce) the price tendered, following the award of a contract. The survey aimed to test the extent to which this is commonplace.

• 34%ofprovidersindicatedthishadoccurred

• 66%ofproviderssaidthatthishadnothappenedtothem.

“Council X called us in, told us we had won, then asked for a lower price.”

“Council Y, on a £1.9M contract, tried to negotiate £150 we’d put in for stationery.”

“We were asked to consider matching the price of a poorer-quality for-profit provider.”


13

“This happens on a number of occasions, due to financial pressures facing local authorities.”

“Everywhere – Council A told us to be cheaper, B reduced our price, C told us our inflation model (1%) was unacceptable, D told us to reduce our price – and E and F likewise.”

Feedback from tendersThe Procurement Reform (Scotland) Bill (2013) contains a range of provisions regarding improved feedback to suppliers. The survey aimed to identify the extent to which providers are satisfied with the feedback they receive.

• 64%ofprovidersfelttheyhadreceivedgoodfeedbackfollowingatender exercise

• 27%feltfeedbackwaspoor

• 9%didnotknow.

While the 64% satisfaction level with the quality of feedback is positive, some concerns arise from responses to this section with respect to tender evaluation processes: providers reported that in some cases, the feedback indicated that information submitted may have been misunderstood; judgements based on information that had not been requested; scoring based on subjective impressions or very marginal differences; and quality indicators linked to proxy outcomes. In other words, detailed feedback in some cases exposed shortcomings in the process.

“Where unsuccessful in Council A, the feedback didn’t make sense. The comments said we hadn’t covered x or x, when we had, in some detail. We didn’t challenge it because we didn’t want to be seen in a bad light for future tenders.”

TUPE

“Public bodies should consider the potential impact of staff transfers under the TUPE regulations on continuity of support to service users and carers; on the cost of delivering the service; on the affected workforce. They should also consider what action they will need to take to facilitate the exchange of [TUPE] information between service providers.” (2010 guidance para 8.106)

In order to get a sense of the extent of staff movement due to TUPE when contracts are transferred between providers following a procurement exercise, the survey included a question on TUPE transfers. Responses indicated that providers in this sample that were awarded contracts following re-tenders transferred a combined total of 907 staff into their organisations, while providers losing business transferred a total of 747 staff out. Clearly, these numbers do not correlate: this is undoubtedly because not all those organisations winning/losing these contracts responded to the survey. Thirty-nine providers reported staff transfers (either in or out).


14

Compared to a CCPS survey conducted in 2008, these figures – whilst still a matter of concern – suggest a reducing trend in TUPE transfers. In that earlier survey, approximately 500 staff were transferred between 15 providers as a result of only 13 tender exercises, whereas the current survey covers very substantially more tenders than this. This is likely to relate to the increasing tendency of contracting authorities to move away from service contract tenders – where there is only one ‘winner’ – in favour of framework agreements, where there is (arguably) less movement of business as a result. This trend is examined in more detail later in this report.

“We’ve done [TUPE transfers] twice and taken more than 100 people each time, and it took us about a decade to recover.”

“The whole tendering and start up process was extremely difficult and required some expert legal advice as well as using a huge amount of management time from preparation stage until several months after the contract started - due to TUPE and other staff issues.”

“One transferring employee in particular had access to a [public sector] pension - very costly for us to replicate and also needed a lot of work to find a comparable package as we are not and could not now become members of that scheme.”

The level and accuracy of information supplied by authorities and existing contractors with regard to the impact of TUPE was regularly cited as a major practical difficulty in putting a tender together, particularly in light of the serious pension liabilities that can exist. In a number of cases this deficiency was sufficient to persuade providers not to submit tenders.

“Calculating costs in relation to TUPE became little more than a ‘finger in the air’ at best.”

Decisions not to submit tenders

“Public bodies should satisfy themselves that the required quality of service and outcomes for individuals can be delivered within the prices tendered.” (2010 guidance para 9.25)

Concerns expressed by providers about low hourly rates16 for care and support are not infrequently met by a response17 that posits responsibility squarely with providers, that is, that care providers should cease bidding for council contracts at prices they feel are too low to deliver the specified service. The survey aimed to test the extent to which providers are already declining to bid in these circumstances.

• 84%ofrespondentssaidthattheyhavechosennottosubmitatender because of imposed conditions

• 16%indicatedthishadneverbeenapositiontheyhadadopted.

http://www.ccpscotland.org/?post_type=resource&p=3787

http://www.communitycare.co.uk/2012/04/18/care-providers-challenged-to-stop-bidding-for-low-fee-tenders/#.UonnH-L-T-A


15

Specific price-related reasons given for not submitting a tender included the implications of TUPE not being clearly set out; price/cost limitations/prescriptions that meant the contract was not viable in their view; an excessive reliance on volunteers; exclusion of travel time; and restricted hourly rates. In addition, non-price related reasons were given, including the nature of the service specification being too restrictive (for example, the service was tied to a building; or it was for time-and-task based care).Providers reported that in at least one instance, a contracting authority withdrew its tender because so few providers were willing to submit a bid within the price cap applied.

Interestingly, among those providers who gave a list of specific tenders with which they had engaged, the number choosing not to submit a tender appears to have risen each year over the last three years, with the main reason cited being imposed conditions that they believe would make it impossible to deliver a quality service. Capped hourly rates were the most commonly referenced imposed condition.

“Council A due to exclusion of travel, B due to quality and price balance, C due to unavailable workforce.”

“Withdrew after initial excitement, because model of support/design proposed was not in line with our values.”

“Opted not to bid ...as price ceiling too low also when TUPE applies but contract period was far too short (1 year)”

“[We don’t bid for] most home care related contracts, due to price cap.”

“Contract was taking service away from [local organisation], a decision I did not approve of.”

“Lack of choice and control for services users over who they were to share their homes with.”

“You look at it, you read it, you assess it, you spend quite a lot of time doing that, and then you go, this is not for us…we will, quite often, get quite far down the road, doing budgets and completing most of the tender, and then…once you’ve waited for the answer to your detailed question, you go, do you know what? Actually that’s a game changer. But you’ve already invested a lot of time and effort.”

Part 3: Providers’ perceptions of trends in procurement practiceAs well as testing providers’ experiences of specific problematic areas relating to tendering, the survey also aimed to explore the extent to which procurement is adapting to accommodate new and developing policy approaches.


16

Commissioning for outcomesProviders were asked whether, in their view, contracts had become more outcome focused over the last three years.

• 24%ofrespondentssaidthatcontractshavebecomemoreoutcome focused

• 29%saidtheyhavenot

• 47%saiditwasamixedpicture.

An example of good practice cited was where an invitation to tender was accompanied by a DVD featuring the service users describing what they hoped the service would help them achieve, with potential providers being asked to describe how they would meet these aspirations. This imaginative approach appears extremely rare with the vast majority of tenders still issued in a conventional input/output fashion with perhaps one or two additional outcome-related clauses added to a standard format.

“Tenders are certainly not becoming less prescriptive but there appears to be a nod to outcomes within the quality questionnaire.”

“Whilst outcomes exist in contracts, contract monitoring remains focused on outputs.”

Framework agreementsAs noted earlier in this report, authorities seem to be moving away from the ‘winner takes all’ approach inherent in much service contract tendering, due to the levels of disruption caused as large volumes of services and staff transfer between providers following a tender. Framework agreements were initially viewed as a positive alternative, although a number of specific difficulties have now arisen in relation to their more widespread use.

Respondents were asked if they had observed a shift to the use of framework contracts in the last three years.

• 68%ofproviderssaidtheyhadobservedashifttoframeworkagreements

• 20%saidtheyhadnot

• 11%didnotknow.

This perception is reinforced by those respondents who listed the specific tenders with which they had engaged during the three-year period: there were twice as many framework contracts listed for the period 2012-13 as there were for 2010-11.

Respondents were also asked if they felt the experience of framework contracts was generally positive or negative.


17

• 24%saidtheythoughttheshifttoframeworkagreementswaspositive

• 20%saidtheythoughtitwasnegative


This ambiguous view is perhaps explained in part when the level of work arising from framework contract is taken into account:

• 8%ofrespondentsfelttheyhadgotmoreworkthantheyanticipated from a framework agreement

• 37%gotlessworkthantheyhadanticipated

• 55%obtainedaroundthelevelexpected.

A number of specific concerns were noted by respondents with regard to framework agreements:

• Atendencytobundleanumberofframeworkstogethertocreatealarger contract which pushes more generic approaches may exclude some specialist providers, and creates higher risk as it becomes ‘all or nothing’ – a failure to get onto the framework excludes a provider from potentially all the work within an authority area.

• Thevariationinnumbersofprovidersonframeworks–insomeareas it is 3 or 4 providers, in others it can be more than 40. This means the chances of gaining work are hugely variable.

• Someframeworksareusedineffecttolimitthenumberofproviders accessing work – so most providers get little or no work allocated – whilst in other areas, frameworks are used to draw in new providers who appear to be given preferential treatment to the detriment of existing providers. There is a general impression that the ‘rules’ need to be more transparent, so providers can assess their opportunities and therefore make sensible business decisions.

• Providersseekingentrytoanewareaviaaframeworkreportthatthey often need to have sufficient resources to carry losses for the first couple of years due to the lack of scale to cover development and support/infrastructure costs. This may exclude some smaller providers without the resources to cover this deficit period.

• Frameworksareincreasinglybeingusedtosupportmovestoself-directed support, but in so doing they may limit choice for users to those on the framework (this is addressed specifically further on in this report).

“Many if not most councils adopting this approach”

“Some of our framework agreements would best be described as broken. [Authorities] are going off-contract; they’re buying in from other places; they’re negotiating side deals; they’re making changes…it’s quite surprising since they’ve gone to all that effort.”

“Vast majority of tenders now on a framework basis.”


18

“It is very difficult for organisations that don’t already have a registered service operating in the council area.”

“Some are far too generalist. Some allow good flexibility.”

“Framework was handled very badly with no service user/family consultation or involvement. We are not aware of any organisation losing services, therefore, it would appear to have been a cost reduction exercise, costing organisations significant sums of money in resources to submit to the framework agreement.”

Generic vs specialist contractsAnecdotally, providers have reported a trend towards generic service contracts and away from specialist provision. The survey tested the extent to which this perceived shift is taking place.

• 54%ofrespondentshadseenariseinthenumberofgenericcontracts

• 33%hadseennorise

• 13%didnotknow.

While this trend is an obvious concern for specialist providers with high levels of skill and experience in helping those with particular needs, it should also be of concern to care managers and commissioners. Providers in this survey reported situations in which they are being called in where care arrangements are either breaking down, or where provider capacity within a framework is insufficient, at least partly because hourly rates for generic services are being set at a level that is too low to enable the provider to support people with specialist or complex needs.

This is a particular concern at a time when the policy goal is to help more people with complex care needs to remain safe and well cared for in their own homes.

“In last 6 months we have looked at several of these – really worrying as they appear to be totally price-driven with personalisation way down the priorities.”

“There is a real feeling that people are being assessed as requiring a generic service when clearly they have specialist requirements.”

“Many councils have shifted to contracts that cover multiple care groups.”

“The Care Inspectorate have recognised that actually, their generic approach to inspection is not working, and they’re going back to specialist teams…and councils are doing the opposite.”


19

Procurement capabilityGiven the increasing scale and volume of tendering activity in care and support, the survey sought views as to whether the competence of contracting authorities is improving with experience.

• 26%ofrespondentsfeltthatcompetenceisimproving

• 55%didnotseeimprovedcompetence

• 19%didnotknow.

Of particular concern to providers is the increasing detachment of procurement staff from social work and social care professional knowledge.

“There are some good examples of transparent and professional arrangements however the majority is amateurish with people who do not know the field/specialism.”

“That’s where Council X have got it right about procurement: the procurement person is involved in an administrative role in making sure the process is done right, whereas all the work beforehand has been done by commissioners.”

“Their specification changed throughout the process (including the day before the submission deadline!)”

“I’ve had to explain to [procurement] people what a sleepover is. You’re buying one, mate!”

Self Directed Support (SDS)

“As policy and legislation on self-directed support develops, public bodies will need to adapt their commissioning and procurement practice.” (2010 guidance para 6.6)

Section 19 of the Social Care (Self Directed Support) (Scotland) Act places a duty on local authorities to promote, as far as is reasonably practicable, a range and diversity of providers, and types of support available to supported people. This aims to ensure that supported people have real choice.

Providers were asked if they were aware as to whether local authorities have SDS commissioning strategies.

• 44%indicatedthattheywereawareofSDSstrategies

• 4%indicatedthattheywerenotaware


• 10%didnotknow.


20

However when asked if local authorities are adjusting their procurement arrangements to take account of SDS the picture was less positive.

• No respondents felt that all the authorities they worked with wereadjusting their procurement arrangements for SDS

• 9%feltthatmostauthoritiesweremakingsomechanges

• 44%feltsomeauthoritieswere

• 35%felthardlyanywere

• 12%didnotknow

“Most looking simply to operate a framework.”

“Still an early stage, we won’t see much till [commencement of the legislation in] 2014.”

Respondents were invited to indicate the type of initiatives being developed to support SDS. As indicated above, the introduction and use of framework contracts was the most commonly cited, with a strong caveat that where these restrict entry or lead to mini-tenders to allocate work, this can risk working against the principles of SDS.

Meanwhile the development of Public Social Partnerships (PSPs) in a number of areas was cited as a positive development, along with some specific initiatives including a market-shaping plan in a major city council and an SDS Directory in a more rural authority.

Tender evaluation criteria

“When procuring care and support services, greater emphasis should be placed on quality rather than cost.” (2010 guidance, para 8.77)

Providers were asked whether, in their view, there has been a shift towards a greater emphasis on quality measures in the tender evaluation process.

• 21%ofrespondentsindicatedthattherehasbeenagreateremphasis on quality in the evaluation of tenders

• 52%indicatedthattherehasnot

• 27%didnotknow.

When asked about their own experience of being successful in winning a contract and whether it was mainly on the basis of quality or cost, 26% indicated they felt quality was the primary factor, 23% felt cost was and 51%feltitwasamixedpicture.

Providers reported that those authorities capping the price within tender requirements have sometimes argued that this removes cost from the evaluation, which is therefore then based 100% on quality. However, where the price cap is as low as £11.34 per hour (as in a recent tender)


21

providers believe that this argument is not plausible. This is perhaps particularly the case where ‘in house’ services are exempt from tender processes and operate on significantly higher hourly rates.

“Quality is easier to evidence now: do you have a health and safety policy? Yes: 2 points. This is not an indicator of quality!”

“Yes, but it doesn’t mean a lot when quality is treated as a threshold that has to be achieved, then it is down to price.”

“Local authorities continue to ‘up the ante’ in terms of staff support and development, quality assurance, qualifications etc all of which are dependent on the hourly rate the same local authority is trying to push down – this is unsustainable.”

“I think for most of our organisations now, the quality is there…we all invest in staff training, we’ve all got good participation structures, we’re all there for the right reasons…that’s why the hourly rate comes in, because they can’t distinguish quality between us any longer.”

“The involvement of service users and carers in decision-making should be considered on a case-by-case basis.” (2010 guidance para 9.27)

Providers were asked if service users were routinely involved in tender evaluation processes.

• 13%ofrespondentsindicatedthatserviceusershadbeeninvolvedin tender evaluations

• 71%indicatedthatserviceusershadnotbeeninvolved


“Very good practice in Council A where individuals, family and carers assessment make up 50% of the tender score.”

“Occasionally there is a token service user on the panel.”

“There has been (involvement) but not routine.”

“Public bodies should ensure the procurement of services takes account of the importance of a skilled and competent workforce” (2010 guidance para 2.2)

Providers were also asked if workforce development considerations routinely feature in tender evaluation criteria.

• 47%indicatedthatworkforcedevelopmentconsiderationsroutinely feature

• 29%indicatedtheydonot


22

• 24%saidthepositionwasvariable.

“Workforce development has featured in 100% of the tenders we completed in the past 3 years. Mostly this is in relation to training, supervision, turnover, involvement and learning culture. In one example we were scored on the frequency of supervision and in another on the number and variety of training programs we provide.”

“Rarely are we tested on, for example, the span of control around manager to workers. Very few councils pay attention to where the registered manager sits in the management structure…they ask questions about training but they don’t ask them specifically enough to elicit the differences between different providers about approaches to the quality of that training.”

“How come Council X has got an anti-poverty strategy, but its contracts won’t enable our staff to be paid at the Living Wage? Within a procurement exercise it’ll ask you a question on staff development and will expect an all-singing, all-dancing answer, while paying you £11 an hour [for the service].”

ProportionalityRespondents were asked whether the time and effort involved in tendering is generally proportional to the value of the contract.

• 13%ofrespondentsindicatedthatthetimeandeffortinvolvedwasproportional to the value of the contract

• 48%ofrespondentsindicatedthatthelevelofworkinvolvedwasnot proportional to the contract value

• 39%saidthatitwasamixedpicture.

One provider observed that 3 years ago it employed 0.5% FTE contracts officer and now employs 3FTE such people, and has observed a similar growth in local authorities.

“[The process is] roughly the same whether it’s a million pound contract or a hundred pound contract.”

“There have been many tender exercises with low values that have required several steps and many hours of work, while some multi-million pound contracts have had a single stage with very few method statements.”

“Far too great a demand for customised, personalised tender submissions. There can often be very little difference between contracts or between councils, and yet the questions or tender requirements can be significantly different. A degree of consistency within and between tenders/councils would surely be more efficient all round?”


23

Best practiceProviders were asked to describe some of the best and worst practice they had encountered through tendering processes. These are summarised below.

Respondents were also asked for examples of where the tender process led to improved quality and outcomes for users. There were very few examples offered, but these generally related to situations where the provider was able to work with the commissioner to redesign services using their knowledge and experience. An example is the radical redesign of day

Worst practice

• Confusing price structure requirements which led to wrong interpretation of our price.

• Nouserinvolvement

• Multiplerepeatedquestions,excessive level of information not relevant to the contract

• Wherepedanticmattersassumeadisproportionate significance (eg. providing the required information but not against the “right” question)

• Lackofengagementbytheauthority to respond to queries

• Obscurescoringcriteria

• Noweightingonqualityinevaluation

• Commissionersnotunderstandingservice, contract or implications (eg TUPE)

• Pooradaptationofagenericcontract

• Contradictionbetweenstatementofrequirements (wanting innovation) and the award criteria (wanting more of the same)

• Failuretoobservetheirowntimescales

• Theprocessleftstaffandusersbewildered and frightened

• Presentationoversubstance

• Tighttimescales

• Tenderisasham–theyknowwhowill be award the contract before the process (the in house team!)

• Poorfeedback

Best Practice

• [Theauthority]visitedserviceswe

provide and met staff and service users and seemed to take a real interest in what we did.

• Wheretheevaluationcriteriaisclearly set out and followed

• Wherethereisuserinvolvementinthe process

• OneauthorityproducedaDVDwiththe “clients” which described what they were looking for

• Wherethereisaclearspecification,a transparent process and good feedback

• Thequalityandknowledgeofthoseinvolved in the evaluation

• Processwasfair,thoroughandchallenging

• Goodconsultationinrelationtothespec, summarising the feedback and reflecting that in the new spec and accurate feedback to the provider following the tender (I’ve experienced elements of that, but not all together)


24

care in one authority area away from being building-based to become day opportunities/experiences, providing better outcomes for clients at less cost to the authority, with another similar example saying

“We were able to offer different models and achieve better outcomes at less cost”.

“Taking over the service that was being unsuccessfully provided by other organisations led to huge improvements.”

Alternatives to tenderingRespondents were asked if they had been involved in processes that provided an alternative to competitive tendering. There were a number of examples offered, although none of these appeared to be widely used:

• “ThedevelopmentofPublicSocialPartnershipsinagrowingnumber of areas.”

• “FollowingaBestValueReviewtherewasamovetooperatethrough a call-off contract.”

• “Housingsupportservicesalwaysbeingallocatedthroughanegotiation process with a range of providers.”

• “Extendingexistingcontracts–whilepreparingforSDS.”

• “Asaprovider,beingproactiveandanticipatingtheendofacontract period and approaching the authority with positiveproposals for how to improve both outcomes and efficiencies (thishasn’t always been successful).”

• “Agreeingvariationsandadditionstocontractsinthecontextofextensions.”

• “Growingacontractbyaddingmoreclientsatsimilarterms/costs.”

• “Factorsseemedtoincludeuniquecontributionweweremakinginterms of provision of premises and added value of other kinds.”

• “Wehaveanumberofcontractswhicharerollingandhavebeenforyears. LA not interested in tendering if there is not a foreseen problem.”

• “Qualitativereviewinvolvingallkeystakeholdersledtoarisk-basedcost benefit analysis, and the decision to continue with the contractrather than tender.”

• “XandYCouncilsrolledcontractsoverratherthanrepeatthetender/framework negotiations, [although] we think this wasbecause they lacked the resources to do this at the time”.

“What is needed is a bit more foresight: [authorities should be saying,] let’s look at what contracts are coming to an end in two years’ time, are we happy with those, is that what we want for the next five or six years? Okay, so let’s take the next 12 months to talk to the existing providers and see how we want to reshape and then maybe we’ll put something out in a year’s time. Because as a provider, there’s nothing like getting a tender


25

in for a service you’ve tendered for before, and go, this is identical in every single way, they’ve just changed the dates and five years have passed.”

Finally, respondents were invited to offer any final thoughts. The following are a selection.

Innovation and service redesign:“It feels like the art of negotiation in terms of existing contracts is lost because of procurement: commissioners will defer to procurement rules rather than get into discussion around contracts, which is a shame as we have had many good ideas on how we could improve our services and deliver better outcomes for people that we have not been able to develop because the commissioners don’t feel able to negotiate those changes to the contract.”

“Effective building of long term partnerships between providers and local authorities would be more effective than continual threats and disruption.”

“To my mind the tight timescales and large volume of work required by competitive tendering limit the ability for submitting organisations to be innovative in their tender and forces us all down the route of stock answers just in order to meet deadlines.”

“Tendering/procurement can inhibit informal discussions/negotiations regarding service improvements initiated by the provider.”

“Providers may be less willing to share ideas and offer savings.”

Process issues:“Timescales are increasingly tight for providers, however commissioners often don’t stick to their timescales – we can be disqualified from competing but there are no consequences when commissioners miss their deadlines.”

“Repetition of information required is onerous.”

“32 different approaches and systems is stupid.”

“Why is there no standard PQQ?”

“The amount of work involved is often out of proportion to the scale of contracts.”

Poor prognosis for change:

“Looks like it is here to stay and organisations need to deal with that reality.”

“A profoundly depressing process that pits organisations against each other.”


26

Analysis and discussion

The survey findings indicate a number of positive developments, from a provider perspective:

• Thereissomemovement,albeitlimited,towardsanoutcomefocusin procurement processes.

• Thereappeartobefewerlarge-scaleserviceandTUPEtransferstaking place between providers as a result of service contractawards, with positive implications for the stability and continuity ofservices.

• Providersareincreasinglyassertingthemselvesinrelationtolowhourly rates and other imposed conditions by declining to submittenders, with at least some evidence that in certain circumstances,this can lead to a re-think on the part of the contracting authority.

• Someauthorities,inpartnershipwithproviders,havebeenabletoidentify and implement more creative alternatives to competitivetendering, including Public Social Partnerships and collaborativeservice redesign.

Nevertheless, the overall perception coming through from the experiences of providers is that procurement practice remains poor, and that the 2010 guidance has had limited success in influencing practice on the ground. Particular concerns highlighted by the survey include:

• Adefinitetrendtowardsgenericservicecontractsandawayfromspecialist support.

• Adefinitetrendtowardsprice-cappedframeworkagreements,which are frequently experienced by providers primarily as ameans of reducing service costs without negotiation, with majorimplications for the workforce.

• Verylimitedinvolvementofproviders,serviceusersorcarersinthedevelopment of commissioning strategies, service specifications orprocurement processes.

• Verylimitedadaptation(todate)ofprocurementapproachesandpolicies to reflect legislative change around self-directed support.

• Continuingdifficultiesassociatedwithtenderevaluationprocesses,particularly in relation to the assessment of service quality and/ora provider’s capacity to deliver it, and with procurement capabilitymore generally.

• Acontinuingperceptionamongprovidersofprocurementasaninhibitor of, rather than a driver for, partnership, innovation andservice redesign.

• Anapparentfailureonthepartofauthoritiestoassessriskorimpact before embarking on procurement exercises.

• Atendencyforsomeauthoritiestoattempttonegotiateorimposeprice reductions after contract award.


27

Key issues to considerScale and risks of the tendering ‘industry’ for care and supportTendering has clearly become a major activity both for contracting authorities and provider organisations. It is probably fair to say that over the last decade, it has grown from being a marginal to a central activity, with dedicated teams of expert staff. Yet it remains unknown whether the costs incurred in running the tendering ‘industry’ are justified in relation to any efficiency savings or quality improvements that have been achieved. To the best of our knowledge, there has been no attempt to cost the inputs required to support tendering activity nor to calibrate these costs against savings or improvements gained: in any case, it would be difficult to attribute either savings or improvements directly and solely to tendering, particularly since another element of the 2010 guidance – that relating to the need to evaluate tender activity – appears to havebeen largely ignored. In addition to direct costs, there may be substantial opportunity costs to tendering.

One of the key drivers for the growth of tendering in care and support is the perceived need to comply with EU Treaty principles of equal treatment, transparency and non-discrimination, which are generally interpreted by authorities as putting them under an obligation to advertise and compete contracts. There may be occasions where tendering is the most appropriate interpretation of these principles, but there may also be occasions where alternatives are preferable, particularly when there is a risk of procurement principles taking precedence over social care principles, as set out in the 2010 guidance. That guidance offers a range of options to authorities in this respect, but providers’ experience of these being implemented in practice remains limited.

Two key characteristics have emerged from this survey and analysis regarding current procurement activity. First, there appear to be two parallel (and, in terms of activity, potentially almost equal) processes going on: tendering and re-tendering handled through procurement teams leading to fixed term contracts or framework agreements which are tightly specified, and alongside this, a largely reactive and frequently urgent or emergency negotiation between a care manager (or equivalent) and a ‘known’ provider to take on a service at very short notice. These situations may initially be short term but can extend and may eventually be regularised through a contract. This can happen in circumstances where a tendered service has broken down. When ‘in-house’ (or directly provided) services that are exempted from procurement regulations are added to this mix, it would appear that tendering may account for significantly less than half of all care and support services. This must call into question the justifications put forward for tendering in other circumstances.

The second characteristic relates to the increasingly marginal benefits to be achieved from tendering, set against the growing risks associated with it. Years of exposure to competition has undoubtedly generated significant savings as both commissioners and providers have got better at describing what is required and better at organising efficient delivery. However most third sector providers report that they are now operating at near optimum efficiency – indeed many report that they are already


28

past this point and are operating services at a deficit, as evidenced in the regular CCPS Provider Optimism Survey18 – and that future savings will therefore only be achieved through further reductions to pay, terms and conditions for support workers, which are already moving further towards (or are already at) minimum wage levels (as evidenced by specific CCPS research19 in this area).

Thus we are seeing a trend towards procurement activity focused much more on generic, price-capped framework contracts delivered by lower-grade care and support ‘assistants’, with the risk of poorer quality care and a potentially increased incidence of contracts breaking down; hours being unallocated; and more expensive emergency solutions having to be put in place, often at short notice. In this context, tendering risks becoming an ever more costly activity with an increasing failure rate in terms of achieving secure, good quality care and support arrangements.

Procurement capabilityWhile the survey does indicate some improvement in procurement capability in care and support, it paints a less positive picture overall. Some of the concerns relating to the quality of tendering processes include:

• specificationsremaininginput-dominated;

• theprocessbeinghugelybureaucratic,withmultiplerequeststo providers for core information, tight timescales, and failure toprovide detailed information following requests from providers ;

• increasingincidenceofprovidersdecliningtotender,indicatinginappropriate specifications or conditions;

• lackofconnectiontocommissioningstrategies;

• acontinuingfocusoncostattheexpenseofquality.

Within this overall bleak picture it is recognised that capability in some authorities is significantly better than others: however in response to the specific survey question seeking out good practice, only 3 or 4 authorities were consistently cited as examples of good practice.

One aspect of the procurement process stood out from the survey as a significant failure and thereby a major missed opportunity. Only 2% of providers indicated that they were engaged by authorities in reviewing or redesigning service specifications to be included in a tender. The fact that providers often possess more knowledge about the impact, viability and practicability of service delivery than procurement officers, commissioners or care managers – and that this rich source of intelligence is generally available at no cost – has been acknowledged by a number of influential reports and reviews including the Changing Lives report of the 21st Century Review of Social Work20, the Christie Commission21 and Audit Scotland’s 2012 report Commissioning Social Care22, as well as featuring in the 2010 guidance.

Current policy development relating to care and support emphasises the importance of partnership, collaboration and co-production, and it is a



http://www.audit-scotland.gov.uk/docs/health/2012/nr_120301_social_care.pdf



http://www.scotland.gov.uk/About/Review/publicservicescommission



29

major disappointment that so few providers report active engagement by authorities in service development and redesign.

Unintended consequences arising from tendering Competitive tendering is intended to deliver the most efficient service delivery arrangements in a transparent and fair way. This survey has shown that the extent to which it achieves this for care and support services may be severely limited: it has also shown that there are a range of unintended consequences that may seriously undermine its primary objectives.

• It can drive out innovation: traditional tendering of tightly specifiedcontracts restricts providers by prescribing what they can doand even where contracts are more permissive, with a focus onoutcomes, providers report that it is virtually impossible to explorethe parameters for change and innovation within a formal tenderprocess and timescale. This situation is exacerbated where thecontract is for a relatively short period, typically 3 years, as thiswill inhibit a provider from offering to invest capital to assist anyredesign and it may well take the duration of the contract periodto carry through any significant changes. This need not be thecase: an example was cited above of a tender specification beingbased on a DVD produced by service users; some authorities offer‘contracts for life’ for individuals with lifelong needs; contracts canbe put in place through competitive dialogue, which can exploreand encourage innovative approaches. However the reality isthat the bulk of current tendering practice fails to adopt theseapproaches.

• It can inhibit collaboration – it is increasingly recognised that theachievement of personal outcomes is best brought about throughcollaboration and co-production, drawing together skills andexpertise from a variety of sources that collectively meet the needsand aspirations of individuals. Conventional tendering processesmake this very difficult. At the most basic level, collaboration withpotential competitors may disqualify a provider if it is consideredto breach the tendering rules. There is also the potential thatcollaborative approaches between different types of provider mayextend beyond the (often narrow) specification and thereforeexceed the budget, even if in the context of a genuinely integratedsystem the proposals might lead to savings. In any event, tenderingtimescales are often too tight to allow for exploratory discussionsbetween providers.

• It can serve to reduce competition and distort the market –tendering has certainly brought down costs, but as noted, futuretendering is only likely to produce marginal efficiencies as mostachievable savings have been realised and many services now runat a deficit. A consequence of continuing to seek savings throughmeasures such as generic service frameworks and price capping islikely to result in smaller and/or specialist providers either ceasingto function, being taken over or merging, and/or providers moregenerally declining to tender where price caps are too low. Overtime the number of providers may therefore reduce (indeedproviders report that in some rural areas this is already happening).


30

Providers also report that in both urban and rural areas, levels of ‘unallocated care’ within framework agreements are growing (that is, where the contracted provider is either declining to provide the care for the contracted price, or has failed to deliver, due largely to an inability to recruit and retain staff within local labour markets). Over the next decade, care and support providers are likely to face a considerable challenge to recruit and retain a good calibre workforce: current tendering practices (particularly price caps) are likely to make this challenge even greater. A focus on short term cost imperatives is making the bigger strategic imperatives of ensuring there is a workforce and a range of providers available significantly more difficult and uncertain.

• It can undermine aspirations for a competent, confident workforce– the Scottish Social Services Council and NHS Education forScotland have recognised that there may be benefits in creating amore generic workforce, including care and support assistants whohave a range of core competencies and skills that are applicable toall care groups. However they also recognise that to be effectiveand safe, such staff need to be properly supported; and for serviceusers with complex and or challenging needs, care and supportmay need to be directly led and delivered by a specialist. Thisinitiative is however still at an early stage, so tenders that specify ageneric approach are, in a sense, ‘jumping the gun’ and potentiallyrelying on an ill-equipped workforce. The longer term risk tothis approach is that specialist care workers and providers maydisappear, with a consequent loss of knowledge and experiencethat will be very difficult to replace. De-skilling the workforce at atime when the policy goal is to help more people with complex andchallenging needs to remain at home is likely to put commissioningand contracting authorities in an exposed position if they areunable to find skilled providers.

Impact of framework agreements As noted, there has been a significant growth in the use of framework agreements and in some respects these have replaced what were previously APL/PPLs (Approved or Preferred Provider Lists). There may be a transparent process to get onto the framework, but often the allocation of work to providers on the framework takes place in a less transparent manner that might involve the ranking or rotation of providers; mini competitions; user choice; care manager choice; or a mix of these. While frameworks have the potential to be a positive alternative to tendering for a standard 3-year contract, the survey and focus group have highlighted a number of concerns that need to be addressed:

• Uncertaintyoverlevelsofworktobeallocatedfromtheframework– this is the biggest consideration for providers, as they need tohave sufficient skilled staff available to meet requests for servicesbut cannot afford to have staff waiting for work that may or maynot materialise. Providers believe that this development has servedto drive an increase in zero-hours contracts for staff, since aframework agreement is itself, in essence, a series of multiple zero-hours contracts grouped together.


31

• Providersreportthatinmanyareas,frameworkagreementsarebeingprepared to support SDS, but where frameworks are either price-controlled or restricted to a small number of providers, this will havethe effect of reducing rather than extending choice for users.

• Thegroupingofmultipleframeworksfordifferentservicesand‘care groups’ into a single very large framework, on the basis thatit will avoid duplication and reduce work for commissioners andproviders, can risk a further push towards generic work as well asincreasing the risks for providers who are forced to ‘put all theireggs in one basket’: if they fail to make it onto the framework, theyhave no fall-back position, whereas if there are multiple frameworksthey may lose out on one but still be included in others.

Procurement in a strategic contextThe development of joint commissioning strategies should ensure that procurement is set within a strategic framework that offers a consistent and coherent approach. However the survey indicates that strategies are still at a very early stage, with few providers being directly involved in their preparation. The consequence of this is a continuing disconnect between commissioning and procurement, with commissioning driven by social work or social care professionals and managers, and procurement by corporate procurement teams. The aspiration is that commissioning strategies become the driver for investment decisions, service redesign and innovation that will deliver a shift in the balance of care and support towards more community based and home based care and support, and this will require procurement activity to be set firmly within the scope of commissioning strategies – but this remains an aspiration rather than current practice.

In most areas current arrangements appear to present a confusing picture, with much tendering and re-tendering taking place in what appears to be an ad hoc and unplanned way, leaving providers having to react to decisions to tender for new services or re-tender existing services rather than to collaborate as strategic partners. As noted above, this process can inhibit innovation and change as it is generally driven by short term expedients.


32

Conclusions and recommendations

The cumulative evidence relating to tendering in care and support, including the evidence presented in this new report, confirms that:

• Competitivetenderinghasmajorimplicationsforthirdsectororganisations with respect to the quality, continuity and stabilityof care and support they are able to provide. Tendering – and inparticular, re-tendering – can have a serious impact on workforceplanning, development, terms and conditions; on the third sectorand the market; and on service users and families. Further, it canconflict with policy imperatives associated with public servicereform, including the priorities accorded to collaboration, co-production, partnership, involvement, empowerment, self-directedsupport and personalisation.

• Procurementofcareandsupportrequiresverydifferentskillsandprocesses to the procurement of other goods and services. This isalready made explicit in the 2010 guidance, however evidence fromthis survey suggests that this guidance has had limited success ininfluencing practice on the ground, and indeed that the guidanceitself requires to be updated to reflect developments as described,for example the impact of framework agreements.

Recently-passed legislation for self-directed support has thrown these issues into even sharper relief as some authorities, in their desire to comply with procurement regulations, may in practice risk restricting choice and control for individuals.

CCPS therefore proposes that procurement reform with respect to care and support might usefully focus on two key areas:

1. Much more discretion for contracting authorities as to whetherthey advertise and compete social care contracts, includingframework contracts (or re-tender them on expiry);

2. Much less discretion for contracting authorities as to how theytender for care and support, should they choose to do so, withparticular respect to the 2010 guidance; and to the terms underwhich they put arrangements in place for care and support services,with particular respect to the quality and sustainability of services.

In relation to the first of these:

Recommendation 1

Contracts for care and support should be exempt from any standard requirement for advertisement and competition.

As noted in the introduction to this report, the combined effect of public procurement regulations and the public procurement reform programme has been that many authorities consider themselves to be under a strict legal obligation to re-tender care and support service contracts and frameworks routinely,


33

regardless of service user views and/or whether there are any performance issues pertaining.

The pressure to comply has led to a situation where some authorities that might otherwise explore alternatives to competitive tendering and re-tendering have been dissuaded from doing so because of the risk of legal challenge.

Recognising this, the Cabinet Secretary for Infrastructure Investment and Cities, Nicola Sturgeon MSP, gave a commitment to the Scottish Parliament in December 2013 that the Scottish Government will bring forward an amendment to the Public Procurement Reform (Scotland) Bill to exempt health and social care contracts from the provisions in the Bill which relate to advertising and competition.

This is very welcome news. The policy objective of the proposed amendment is largely in line with what CCPS asked for in its evidence23 on the Bill and CCPS will seek to work with the Bill team to progress this.

This commitment is in keeping with the revised European Public Procurement Directive, which recognises the specificity of social services, excludes them from the full application of the Directive, and states that Member States and/or public authorities remain free to provide these services themselves or to organise social services in a way that does not entail the conclusion of public contracts (Preamble (11)).

In relation to the second key area:

Recommendation 2

The 2010 guidance on the conduct of procurement exercises in care and support should be updated, revised, and given much greater legislative force, with its implementation subsequently monitored through scrutiny and inspection.

Revision and updating of the guidance might focus on the following areas in particular:

• Theneedtosettenderingactivitymorefirmlywithinthecontextof commissioning strategies, driven by policy imperatives andprinciples relating to social care rather than by procurementprocedural processes.

• Theincorporationwithincommissioningstrategiesofannualprocurement plans that set out purchasing intentions, procurementarrangements and areas for market development, change andcontraction.

• Theconductoftenderingandre-tenderinginastrategicandproportionate way by:

• focusingtenderingactivityonfailingservices

http://www.ccpscotland.org/wp-content/uploads/2014/03/CCPS-evidence-to-ICI-Committee-Nov-2013.doc.pdf


34

• betteruseofmarkettestingand/orquality/costbenchmarkingto demonstrate value for money across a wide range of services

• ensuringthattheworkinvolvedinrespondingtoITTsisproportionate to the scale/value of the contract.

• Fullengagement,asstandardpractice,ofproviders,serviceusersand carers in reviewing and developing service specifications priorto procurement exercises commencing.

• Theexplicitprioritisingofservicequality,outcomes,continuityofcare and service user preferences as the basis for decision-makingin procurement and contract arrangements, recorded as part ofroutine risk/benefit analysis activity.

• Cessationofthepracticeofapplyingpricecapstocontractsincareand support.

• Theapplicationofa‘levelplayingfield’approachtoprocurementactivity, to ensure that failing or in-house services are also exposedto competition, as appropriate.

• Acknowledgementofthelimitationsofgenericcareandsupportcontracts, and identification of the role of more specialist provisionin commissioning strategies and procurement plans.

CCPS would add to its central recommendations, as above, two further recommendations arising from the evidence presented in this report, as follows:

Recommendation 3

National partners should collaborate in further analysis of contract failures and breakdowns in order to establish the scale, consequences, causes and costs associated with providers being unable to meet the requirements of contracts.

Recommendation 4

National partners should collaborate in an evaluation of the overall costs and benefits arising from tendering and retendering in social care, to establish whether or not there is added value achieved through these activities at the scale currently applying.


35

Endnotes

1 Scottish Government/CoSLA 2010 guidance on procurement for social care services - http://www.scotland.gov.uk/Publications/2010/09/21100130/0

2 Social Care (Self-directed Support) (Scotland) Act 2013 - http://www.legislation.gov.uk/asp/2013/1/contents/enacted

3 Public Contracts Scotland online portal - http://www.publiccontractsscotland.gov.uk/

4 Coalition of Care and support Providers Scotland (CCPS) - www.ccpscotland.org

5 Scottish Procurement Policy Note SPPN 10/2008 – www.scotland.gov.uk/Resource/Doc/116601/0065310.pdf

6 Public Procurement Reform Programme - http://www.scotland.gov.uk/Topics/Government/Procurement/about/Review

7 CCPS Competitive Tendering in social care: a position statement - http://www.ccpscotland.org/wp-content/uploads/2014/03/Tendering-CCPS.pdf

8 CCPS Findings of a national survey of members 2008 - http://

www.ccpscotland.org/?post_type=resource&p=3798

9 CCPS A gathering storm:impact of re-tendering on the third sector workforce - http://www.ccpscotland.org/wp-content/uploads/2014/01/AGatheringStorm.pdf

10 Scottish Parliament Local Government and Communities Committee:inquiry into the procurement of home care services 2009 - http://archive.scottish.parliament.uk/s3/committees/lgc/inquiries/HomeCareServices/index.htm

11 Audit Scotland: Commissioning Social Care - http://www.audit-scotland.gov.uk/media/article.php?id=194

12 Procurement Reform Bill 2013 - http://www.scotland.gov.uk/Topics/Government/Procurement/policy/ProcurementReform

13 Scottish Procurement Information Hub - www.scotland.gov.uk/Topics/Government/Procurement/eCommerce/ScottishProcurementInformationHub

14 Public Contracts Scotland online portal - http://www.publiccontractsscotland.gov.uk



http://www.publiccontractsscotland.gov.uk/

http://www.ccpscotland.org


http://www.scotland.gov.uk/Topics/Government/Procurement/about/Review

http://www.ccpscotland.org/assets/files/ccps/pubilcations/Tendering%20CCPS.pdf

http://www.ccpscotland.org/assets/files/ccps/pubilcations/retenderingsurveyfinal.pdf

http://www.ccpscotland.org/assets/files/ccps/policy/AGatheringStorm.pdf

http://archive.scottish.parliament.uk/s3/committees/lgc/inquiries/HomeCareServices/index.htm

http://www.scotland.gov.uk/Topics/Government/Procurement/policy/ProcurementReform

www.scotland.gov.uk/Topics/Government/Procurement/eCommerce/ScottishProcurementInformationHub

http://www.audit-scotland.gov.uk/media/article.php?id=194

http://www.publiccontractsscotland.gov.uk


36

15 Public Bodies (Joint Working) (Scotland) Bill - http://www.scottish. parliament.uk/help/63845.aspx

16 CCPS Hourly rates for care and support report 2012 -www.ccpscotland.org/?p=3787

17 Community Care “Care providers challenged to stop bidding for low fee tenders” - www.communitycare.co.uk/2012/04/18/care-providers-challenged-to-stop-bidding-for-low-fee-tenders/#.UonnH-L-T-A

18 CCPS Provider Optimism Surveys - www.ccpscotland.org/wp-

content/uploads/2014/03/Provider-Optimism-Survey-Report-

Winter-2013-141.pdf

19 CCPS report into Employment Conditions in the Scottish Social Care Voluntary Sector - http://www.ccpscotland.org/wp-content/uploads/2014/03/Employment-Conditions-Report.pdf

20 Changing Lives report of the 21st century review of social work

- http://www.scotland.gov.uk/Publications/2006/02/02094408/0

21 Christie Commission on the future delivery of public services - http://www.scotland.gov.uk/About/Review/publicservicescommission

22 Audit Scotland: Commissioning Social Care - http://www.audit-scotland.gov.uk/docs/health/2012/nr_120301_social_care.pdf

23 CCPS Evidence to Infrastructure and Capital Investment Committee November 2013 - http://www.ccpscotland.org/wp-content/uploads/2014/03/CCPS-evidence-to-ICI-Committee-Nov-2013.doc.pdf


http://www.ccpscotland.org/assets/files/ccps/publications/FOImainreportCCPS2%20%284%29.pdf

http://www.communitycare.co.uk/2012/04/18/care-providers-challenged-to-stop-bidding-for-low-fee-tenders/#.UonnH-L-T-A

http://www.ccpscotland.org/publications/research-reports

http://www.ccpscotland.org/assets/files/Employment%20Conditions%20Report.pdf


http://www.ccpscotland.org/assets/files/ccps/news/documents/CCPS%20evidence%20to%20ICI%20Committee%20Nov%202013%20doc%20%282%29.doc



About CCPSCoalition of Care and Support Providers in Scotland is the national association of voluntary organisations providing care and support services across Scotland. In 2011-12, CCPS members managed a total annual income of over £1.3 billion, of which an average of 78% per member organisation related to public funding.

Over this period, members supported approximately 350,000 people and their families, and employed around 43,000 staff.

CCPS - Coalition of Care and Support Providers in ScotlandNorton Park57 Albion RoadEdinburgh EH7 5QY

T. 0131 475 2676E. [email protected] www.ccpscotland.org

CCPS is a company limited by guarantee registered in Scotland No. 279913, and a Scottish Charity registered with the Office of the Scottish Charity Regulator (OSCR) No. SC029199

© CCPS 2014. This document is copyright protected and may not be reproduced, in part or in whole, without the permission of CCPS

cpcsCOALITION OF CARE AND SUPPORT PROVIDERS

I N S C O T L A N D

COALITION OF CARE AND SUPPORT PROVIDERS IN SCOTLAND ... · In October 2013, the Scottish Government...

Documents

Transcript of COALITION OF CARE AND SUPPORT PROVIDERS IN SCOTLAND ... · In October 2013, the Scottish Government...