Buy big, or small?

Local authority and primary care trust commissioners of health and
social services are being torn between apparently competing
pressures to enter into large-scale joint procurement agreements
while, at the same time, keeping services as close to the end user
as possible.

On the one hand Peter Gershon’s public sector efficiency review
advocates establishing “central procurement vehicles” to maximise
commissioners’ purchasing power. Improved commissioning of services
such as adult social care, social housing and children’s services
could contribute 35 per cent of the £6.45bn annual savings
Gershon claims can be made in local government.

PCTs are coming under similar pressure. The recent Health and
Social Care Standards and Planning Framework, published by the
Department of Health in July, urges PCTs to work in partnership
with local authorities (particularly social services) and to enter
into commissioning agreements on “a pan-PCT or still broader

However, before these large-scale commissioning conglomerates can
begin flexing their collective muscle, a number of initiatives seem
to be pulling in the opposite direction.

For instance, from April next year practice-led commissioning will
allow GPs and other front-line care services to hold “indicative
budgets” from their PCTs. These budgets can then be used to
commission services at a local level that are specifically tailored
to the needs of their patients. According to health minister John
Hutton “this will enable GP practices and other groups to play a
bigger role in commissioning services for their patients and local

Community care minister Stephen Ladyman has also made it clear,
through his personal drive to increase the uptake of direct
payments, that he favours a local approach to service delivery.

So is it possible to get the best of both worlds – to buy big but
deliver small?

“I don’t think the two are necessarily incompatible,” says Julia
Ross, director of social services at Barking and Dagenham.

“Provided you have a good relationship with your PCT it should be
possible to maximise your purchasing power but retain enough
flexibility to ensure that you keep end users’ interests at

“Gershon is really about preventing large suppliers negotiating
lots of little contracts with individual authorities and PCTs. You
can then use those savings to reinvest in front-line services.
However, we are talking mainly about back office services like

Contracts for equipment such as wheelchairs and living aids could
also be made jointly by PCTs and local authorities. Indeed, Barking
and Dagenham is currently planning an integrated community
equipment store that will be shared between social services and the

Ross feels that practice-led commissioning could be a positive move
towards ensuring services remain responsive to local needs.

“As long as it is done right and not used as a way of going back to
the days of GP fundholding. It could also allow front-line
practitioners other than GPs to take on a care manager’s

Ross stresses that she is aware of the “nightmare scenario” in
which PCT and local authority join forces to create a monolithic
structure, unresponsive to users’ needs and in which social
services priorities become usurped by those of the health

“But I don’t see it working that way. Local authorities are very
powerful in their own right and they tend to be more flexible than

John Beer, director of social services in Southampton, also
believes that social services can hold their own when joining
forces with PCTs.

“We do feel that we are equal partners and that we have common
goals with the PCT,” he says.

One problem within these joint relationships, however, is that the
common goals of health and social services are not reflected in
common performance targets and standards. If the performance of the
two services is being judged against different criteria, then
different priorities are bound to emerge.

“I do keep on at the DoH to introduce joint targets so that we are
both responsible for achieving the same thing,” says Beer.

There are also a number of legal barriers to be cleared before
seamless co-operation between social services and PCTs becomes a

“It’s not always that simple to pool budgets,” says Beer. “There
are all the section 31 partnership agreements to get through and
that tends to keep our learned friends rather busy. It certainly
would be helpful if the government could sort that out.”

Nevertheless, Beer believes that as long as joint commissioning is
targeted towards those services to which it is best suited (for
instance drug support services, services for older people) then
there is no reason why it should harm front-line delivery.

“The challenge is on both local authorities and PCTs to demonstrate
that we can use pooled budgets and still keep things local. Most
people want to stay in their own communities so we need to ensure
that we respond to that.”

One factor that may have contributed to Ross and Beer’s relatively
positive assessment of joint commissioning is that both Barking and
Dagenham and Southampton local authorities have co-terminous
boundaries with their local PCTs. Where this is not the case,
problems can arise.

According to Deborah Roche, a senior research fellow at the
Institute for Public Policy Research, the lack of a co-terminous
boundary is one of the reasons why around one in five joint
commissioning arrangements between PCTs and social services fails
to live up to expectations.

“One third of PCTs currently have joint commissioning agreements
with social services but only about 80 per cent consider those
arrangements to be effective,” she says.

Commonly cited reasons for dissatisfaction include the lack of a
co-terminous boundary and the different funding streams and cycles
for health and social care services.

“Health and social care also have slightly different objectives
which can influence their commissioning priorities,” says Roche.
“The health service is largely focused on improving health
outcomes, while social care is concerned with broader outcomes,
such as an individual’s ability to live in the community.”

Roche, who recently published a report examining the performance of
PCTs, does believe that joint commissioning can have a positive
impact on front-line services. In particular, she says it can be of
benefit to those patients with multiple chronic conditions and for
people with complex health and social care needs who come under
health, social care and local government remits.

However, for this to happen the government needs to clarify what is
expected of those involved.

“The centre is sending confusing messages. On the one hand, it
provides devolved power and decision-making, on the other hand it
places devolved bodies under central guidelines and target regimes.
There is certainly room for clarity in this debate.”

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