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Putting existing services out to competitive tender - a process known as retendering - has become a hurdle many service providers have to clear regularly. It provokes immense stress, and those on the receiving end are often left wondering why local authorities do it.

The most obvious reason for retendering is because the provider has failed to meet appropriate standards, is in financial difficulties or simply wishes to withdraw. But there might be other factors.

First, there is the belief that retendering can deliver Best Value - and improvements in cost and quality are an entirely legitimate aim. However, there is a suspicion among some providers that "testing the market" sometimes occurs without much forethought, as a sort of commissioning reflex. It may also be motivated by a desire for social services to show that they are "on top of the situation". Yet the most important function of re-tendering is to bring about improvement. Given this, surely there is a need for well documented evidence for the effectiveness of re-tendering as a commissioning tool in social care - evidence which is hard to find.


Second, there is pressure on commissioners and care managers to be "seen to be doing something". Making improvements is hard, and it is important that any improvements are visible. Social services staff must convince elected members that they have a grip on cost and quality. But in many cases encouraging incremental improvement would be a far more effective improvement tool than simply putting providers through the expensive and time-consuming retendering process.

Third, there is the need to avoid complacency and stagnation - and to drive innovative improvements. However, retendering is a drastic remedy. There are other, less risky ways to maintain impetus and create positive change. At the very least, the benefits must outweigh the disadvantages by a big enough margin to justify the exercise.

The reasoning behind a decision to retender is often flawed. I have found that councils often do not have a clear idea of what they are trying to achieve. What exactly is the market being tested for?

Service providers' concerns about retendering centre on its cost, the effect on the people who use the service, how quality of service is affected, and the impact on partnerships.

For a start, retendering is very expensive. It drains the slender resources of both tendering authority and providers. The more wide-ranging the exercise, the more it costs. It would be a salutary exercise for tendering authorities to calculate the real cost to them of retendering.

The concept of cost savings is the aspect that seems most puzzling. No matter the provider, the cost of providing social care services is largely determined by staffing costs, typically amounting to 70-75 per cent of the total. Cutting staff is likely to attract unwelcome attention from the regulator. A change of provider will almost certainly cause the Transfer of Undertakings (Protection of Employment) Regulations 1981 to be invoked in order to safeguard staff conditions. Given the cost of retendering in the first place, it is difficult to see how worthwhile savings can accrue over the term of the average contract.

Above all, it seems likely that any saving achieved through retendering will not exceed that available through simply sitting down with the provider and going through the budgets with a fine tooth comb. Yet this happens infrequently. This may simply be due to a lack of confidence on the part of council staff that they understand independent sector finances. But if this is the case, are they really in a position to make meaningful comparisons between the benefits and disadvantages of a tender exercise?

The effect on people who use the service is also problematic. Retendering sometimes forges ahead with little consultation with service users. Yet even where consultation is undertaken, it can produce strange effects.

If people express serious dissatisfaction with the service, the way is clearer. This is arguably the best reason for retendering - provided that there is a probability that retendering will put things right. This requires commissioners to make clear from the start exactly what improvements are being sought. Yet the experience of providers is that, in practice, this rarely happens.


In other cases, clients and their carers and relatives express reasonably high levels of satisfaction. It is possible that people say they are satisfied simply because they are not aware of other, better approaches. But the anticipated benefits must be weighed against any possible disadvantages, such as disruption and periods of uncertainty.

Quality issues are also significant. Re-tendering in the expectation that an alternative provider will come up with a good idea is not sound. The onus is on the local authority to spell out what it is looking for and how that can be achieved. However, most authorities will admit that they have much work to do in this area. It is all the more surprising that the decision to retender often comes before any formal assessment of the quality of the existing service.

In addition, where a local authority can identify required improvements, it makes sense to exhaust simple remedies first. If sitting down with the existing provider and spelling out the changes required does not work, by all means proceed to retender.

Finally, there is the impact on partnership. Purchasers and providers are constantly urged to work in partnership. But retendering puts the partnership approach under strain because it can make providers reluctant to expose some aspects of their operations, thus impairing openness. It can also destabilise provider organisations. Local authorities naturally focus on the services they commission directly. Doing so can, however, have negative consequences for the provider's other services or services in neighbouring authorities.

Most important of all, it can make collaboration between providers more difficult. It is not easy to switch from competition to co-operation. But greater co-operation between providers is precisely what learning disability partnership boards seek. It is also vital for councils to encourage providers to work with one another if reconfiguration of local services is to be achieved.

Providers feel time is wasted by these barren exercises, and because the benefits of partnership working far outweigh the benefits of competition. Of course, some providers can't cope with the heat and are scared that they will be exposed in some way. But the shared aim of providers and purchasers is to provide services for vulnerable people. This is not the same thing as supplying a fixed commodity, the quality of which is easily measured, and it should not be managed in the same way. For example, a tool for deciding who gets the contract for environmental services would not be appropriate for use where social care provision is concerned. 

Steve Inch is chief executive of New Support Options, which provides care and supported living for people with learning difficulties.