Understanding Commissioning and Procurement

Commissioning is the process of deciding what public services are needed, what priorities they are accorded and choosing what, why, how and where to allocate resources to provide services. Service users, communities and third sector organisations hold the knowledge, ideas and skills that can often be vital to the design and implementation of the best services possible.

Procurement is a method of purchasing services which results in contracts.

Tendering is a form of procurement. The commissioner defines the service required, and bidders specify how they would provide that service, for how much. Leads to a contract.

A contract is a legally enforceable agreement which is treated as legally binding on the parties who enter into it.

Public bodies should use a good commissioning approach to assess the needs of their local area and identify services that create better value and outcomes for service users, the public and the environment.

HM Treasury has identified 5 reasons why the Third Sector may be able to deliver certain services more effectively than the public or private sectors:

1) Specialist knowledge, experience and/or skills. This may come through direct experience of the user perspective. An example of this might be ex-addicts working on a drug rehabilitation programme or ex-offenders working with young criminals.
2) Particular ways of involving people in service delivery whether as users or self-help/autonomous groups. An example here would be an organisation working closely with users themselves or their families and friends to plan and deliver services.
3) Independence from existing and past structures/models of service. Third Sector organisations are not bound by structures or rules in the ways in which more traditional public sector agencies are. They are independent and so can try to deliver services in new
and innovative ways.
4) Access to the wider community without institutional baggage. Public service workers are often perceived as representatives of an authority which certain groups have learned to mistrust. The Third Sector is independent of government and therefore free to be unequivocally on the user’s side.
5) Freedom and flexibility from institutional pressures. The sector can offer responsive services which are user-centred as they are not driven by budgets and targets within the public sector. At best they can be flexible and innovative rather than prescriptive.

Commissioning the Third Sector to deliver certain services not only harnesses these advantages to produce more effective, better quality services for users but also provide opportunities to achieve wider social and economic objectives such as increasing local employment, improving local skills and increasing the self-esteem and confidence of local communities.
 
The Role of the Voluntary and Community Sector in Service Delivery: A Cross Cutting Review, HM Treasury, September 2002, The Stationary Office Ltd, 9/02 770543 19585