Quietly in meetings over coffee I and other CEO’s and senior managers in the sector have been sharing concerns for years about poor procurement and tendering in the drug and alcohol sector. When I spoke to Martin Barnes, CEO at Drugscope the umbrella organisation for the drug and alcohol sector, recently shared the long standing and growing concern with the state of commissioning and procurement in many areas.
However to address the issue we need evidence of the impact on staff, organisations, and examples of poor practice and waste. (How much does it cost service providers to tender, how much money do commissioners spend on consultants?) We cannot just complain about the process we have to demonstrate its impact, unfairness, and consequences for service users and on service provision and quality. It is perfectly legitimate for local authorities to retender work provided to them by contractors, however in the context of Big Society there needs to be a level playing field for the third sector and local third sector providers.
Poor and frequent commissioning has a number of serious consequences not least of which is the cost. An exercise to quantify the costs of tendering services over 10 years ago came up with a figure of £300,000 as the cost expended by all bidders and the commissioner per tender.
At a recent provider meeting with Public Health England (PHE) in London concern was raised by PHE about the low morale of staff across the treatment system.
Feedback by those there was that this was due to;
- Constant rounds of retendering of services.
- Changing goal posts (and the lack of thanks for a job well done).
- A TUPE cycle of 1 year job insecurity – 1 year changing an often great service to something different unclear and underperforming (if you keep your job and even if it’s still with the same provider) – 1 year performing in a new role (often excellently) – 1 year job insecurity. Often this cycle is truncated and eventually inevitably leads to worker burn out for many people.
- Many services have been retendered several times over a three year period inevitably causing insecurity and disruption to service delivery.
- Worries about costs cutting by Local Authorities in the coming years and further redundancies.
- The current lack of direction and leadership in the sector.
- Most people not having had a pay rise for 4 years.
Procurement, tendering and contracts
We have to accept that tendering of services is here to stay and that providers will all win and lose contracts, however I think there is a case to be made to increase from the standard 3 year contract to a 7-10 year minimum contract length or possibly longer.
The contracts are often very one sided and allow cancelation with three or six months notice. Often providers are asked to agree to the contract as a condition of being allowed to tender which is clearly unfair. Contracts need to be far less easy for Local Authorities to wriggle out of with an expectation that any but the most major changes required are done via contract variation rather than retendering except where there are clear performance issues.
At Blenheim we are concerned about the minimum turnover requirements that are beginning to affect the ability of small providers to tender for contracts they currently hold. This is where to bid for work you have to have a minimum turnover of say £5 or £10 million. I am aware of many smallish and medium sized charities that have not been able to bid for their own contracts back in their own right forcing them into shot gun marriages with other providers as junior partners. This has on occasions included Blenheim despite us being in the top 750 charities in the UK by income out of 66,000 charities.
Partnerships have a lot to offer and Blenheim is in many great and highly effective partnerships but they rarely work well when they are marriages of convenience.
Blenheim is concerned that we are starting to see the demise of local third sector organisations operating and attuned to local communities and their replacement by profit motivated or organisational survival motivated or growth driven organisations. This I already hear and see impacting detrimentally on service provision.
Blenheim is concerned about minimum standards in the drug and alcohol sector with the move to Local Authority commissioning and the demise of the National Treatment Agency. Providers are all being forced to compete on price rather than quality and this has a direct impact on who is employed or made redundant. The people service providers employ and their skills and ability is what makes the difference to the mothers, fathers, children, sisters, uncles, neighbours, friends and grandparents with a drug or alcohol problem we are here to help. These people deserve a quality service delivered against exacting standards of performance and staff competence not the cheapest available.
Blenheim is deeply troubled about the many instances of poorly managed tendering processes which create huge wastes of time and effort both at commissioning level and within provider organisations. This is now a regular occurrence and issues have included;
- Unfair decisions which when challenged are changed or not.
- A lack of transparency about the process.
- The number of tendering processes which have to be suspended due to flaws in the process.
- A lack of knowledge about tendering and procurement within tendering teams.
- Complete lack of understanding by many commissioners of TUPE rules.
- Attempts to dump significant pension liabilities on incoming organisations where NHS or Local Authority is the outgoing organisation.
- Sometimes completely ludicrous and unworkable specifications.
- Transfer of risk from Local Authorities to providers via Payment by Results with poor data to assess risk and often in relation to performance targets the provider has little control over.
At Blenheim we think its time we should stop talking and start acting as a provider and a sector to raise these concerns via Drugscope and other forums.