Collaborative commissioning: why London councils are clubbing together to buy services

Several London councils are pooling resources and attracting new funding in a bid to improve services while achieving savings. David Callaghan looks at whether bulk buying could catch on

Group discounts are familiar to theatre goers and even rail travellers. A little is lost on each ticket, but it makes business sense as the seats at the venue or on the train are filled by customers who feel they are getting a good deal.

But could this technique work in social care? Five local authorities in south west London think it can, particularly if the
councils have enough in common. In this case, the five want to end the practice of placing learning difficulties clients far from their homes.

Under the label “mutual marketing management”, five councils led by Merton – Croydon, Kingston, Richmond and Sutton are the others (Wandsworth initially showed interest but dropped out) – are looking at developing a relationship with service providers which reflects their strength in numbers.

The idea is different from joint commissioning, which usually involves different agencies coming together.

Rahat Ahmed-Man, joint commissioning manager for Merton Learning Disability Partnership, says: “We are trying to manage our market and our relationship with the providers.” She adds: “One way we could do that is to agree an ‘uplift’ (to limit cost increases) with neighbouring boroughs, say 2 per cent, and tell that to the providers. It puts us into a better negotiating position.”

A manager for the mutual marketing project has been appointed, but has yet to take up the post. The scope for collaborative work between local authorities will be most attractive in specialisms, she says. Funding of £40,000-£50,000 was granted
to the project by the London Centre of Excellence, which was set up by the government and is hosted by the Association
of London Government. It helps London boroughs deliver the national procurement strategy (1) and the Gershon review.(2)

The centre’s director Ken Cole says the boroughs know each other well and are close geographically, which gives the project a sound base.

He says providers usually work within a sub-region, so it makes sense to have groupings of councils to match up with the providers. “But we want to check it works and then extend it, rather than go at it with a big bang,” he says.

The rationale for collaborative commissioning is clear to Cole: “A lot of money is spent on social care in London and we have
some service bottlenecks.”

A report from the centre found there was government pressure on councils to share services (where one public body provides
a particular service for itself and another organisation), but also said that financial constraints proved to be a stronger force.(3)

The opportunity to save money while providing a more coherent service close to home is one many social services managers
will find attractive.

Croydon, Merton, Richmond and Sutton are also working on a scheme to develop a supported living facility for adults with
severely challenging behaviour.

With services for people with learning difficulties one of the biggest cost areas for social care, Ahmed-Man says: “Placements for these people [those with severely challenging behaviour] are extremely high cost, residential and out of the borough. As there are budget ary pressures and a shortage of land, we have got together and put a bid to the strategic health authority.”

Jeff Jerome, director of adult social services and housing at Richmond Council and joint chair of the Association of Directors of Social Services’ disabilities committee, says: “There is a limited number of people with challenging behaviour in each of the boroughs who we have difficulty finding placements for. That’s why we are looking at clubbing together to buy that service more locally.”

A residential home will be hosted in one of the boroughs, but there might also be scope to set up tenancies with a housing
association. Legal agreements have been drawn up and the next stage is to invite bids from a registered social landlord.

Another group of councils has formed the West London Alliance (WLA) to look at commissioning services jointly.

The councils – Brent, Ealing, Hammersmith and Fulham, Harrow, Hillingdon and Hounslow – plus Camden, Kensington and Chelsea and Westminster, asked a consultancy to assess the viability of such a move.

Jonathan Poore, a manager with consultancy Impower says: “The WLA authorities recognised the potential for collaborating on the procurement of adult social care to improve service quality and realise savings and efficiencies.”

One supplier receives 40 per cent of its revenue from the WLA, so there would be the potential to make it a buyer’s market in
that instance, he says. “Our report showed savings of about £12m. Imagine these extrapolated across London and, indeed, the UK,” he says.

Poore says, though, that the funding for the south west London project accelerated its progress. “The group has chosen
an example [of a service] and gone for it,” he says. “The sad thing is, if the funding isn’t available, will it still happen?
What can happen is that councils ask ‘what is in it for us?’ and the thing is stalled by inertia.”

In Greater Manchester, out-of-authority placements for children and young people are monitored by a team based at Tameside,
Ashton under Lyne. The Out of Authority Placement and Joint Commissioning Unit provides information on service providers
to member authorities of the Association of Greater Manchester Authorities.

The councils are then expected to report back to the unit on placements they have made, and that information is then  analysed.

Regional commissioning activity can then be tracked by AGMA. What about the clients? How do they regard attempts by councils to club together and buy services for them?

David Congdon, head of campaigns and policy at Mencap, has concerns: “The danger of any collaboration is that you end
up with the councils coming up with a onesize- fits-all solution, and that would be a very serious reservation.”

He is worried that, in the case of supported living for adults with learning difficulties, the size of any home is important.

“Councils usually set something up and find people to fill it. The challenge for the councils is whether these people actually want to live there,” he says.

He says at present many people in supported living had no choice about where they were placed. “It needs to be tailored to
individual needs,” he says.

The jury is still out on collaborative commissioning by local authorities, but it may be worth trying in some areas where
councils are geographically close and have common features.

They say the best ideas are the simplest ones, and while accepting there are complexities and pitfalls to be avoided, the project in south west London may prove that by simply working together they can achieve some impressive results.

Further Information
(1) National Procurement Strategy for Local Government 2003, Office of the Deputy Prime Minister, 2003
(2) Sir Peter Gershon, Releasing Resources for the Frontline: Independent Review of Public Sector Efficiency, HM Treasury, 2004
(3) Shared Services Final Report, London Centre of Excellence, 2006

Merton Learning Disability Partnership
West London Alliance

Additional reading
Step-by-step guide on collaborative commissioning
False economies: the risks for councils who cut services without thinking
Why joint commissioning isn’t the be all and end all of service management

This article appeared in the magazine on page 30 (28/9 – 4/10 issue) under the headline: By Mutual Consent