The impact of competitive tendering on social services and service users

Mark Drinkwater reports on how the revolving door of competitive tendering of services can leave staff, and service users, feeling all at sea

As local authorities drive down costs, social workers and service users face uncertain futures when services are farmed out to non-profit organisations and profit-making companies.

But the competitive tendering process involved, where providers attempt to undercut each other, causes considerable unease. Local authorities might have extensive experience of procuring commodities such as office stationery but sourcing the cheapest social care provider does not necessarily result in best value for service users.

A particular concern is how supported living services for people with learning disabilities are tendered out says Ian Hood, co-ordinator of the Learning Disability Alliance Scotland, which produces a guide on what people with learning disabilities should expect when councils change services. He says that such changes can be extremely distressing for service users: “There is a lot of anxiety because people with learning disabilities often don’t understand the process that is happening to them. They feel very vulnerable about what’s happening to them when services transfer to a new provider.”

Ruth Cartwright, manager of the British Association of Social Workers in England, says continuity is important for those with learning disabilities as they find it harder to understand and adjust to change. She fears that the quality and viability of services is at risk from budget cuts.

“There is a trend to cut costs and cut corners and people with a learning disability are among those who are least likely to complain or to raise concerns,” she says. “Service users have always been susceptible to market forces, but you have to wonder if that does result in the best care for service users. When services are going out to tender, commissioners should not just be looking at the price but should be looking at the nature and the culture of the provider.”

Speaking anonymously to Community Care, a learning disability service manager in central London expressed unease about the adverse effect of changing providers: “In theory there should be little change when a new provider takes over a service, because the staff should remain the same. However the change of provider can create instability in staff teams and this can have a knock-on effect on service users, because it is not unusual to have a high staff turnover after a service transfers to a new provider.”

The manager adds that when a provider changes, staff should be retained and their pay and conditions should continue with the new employer under TUPE regulations.

But, he says, staff transferred under TUPE have change imposed on them and this is particularly unwelcome when the new employer is a company that expects to make a profit when they deliver a contract. “Some long-serving staff who have transferred to a national provider or profit-making company have definitely experienced a culture shock after years of working with a local provider,” he says.

The element of competition in tendering can hamper partnership working between agencies, including at the time of handing over a service to the winning bidder. But while there is concern that former providers might not share all the relevant information with the winning bidders, there is generally good practice says Sian Hoolahan, a development manager at the supported housing charity Choice Support. “In my experience, even though there is competition in the tenders, most providers will put the people first,” she says.

Hoolahan is mindful of the impact a change of provider can have on people with learning disabilities. She stresses that service users need to be involved in influencing the decision making to minimise the difficulties and uncertainties in the process.

Without the meaningful involvement of service users, the tendering out of services can seem at odds with the personalisation agenda, which promotes user choice and control. In this respect, Hoolahan says that councils are improving: “Some commissioners are getting better at involving service users in the tendering process. Often there will be service users involved on selection panels and I’ve had to give presentations to service users when we have tendered for a service.”

Hood says service users need to be involved from the outset of the tendering process. “One of the problems is a fear that local authorities have that if they tell people too soon about what’s happening they will be upset. So they don’t tell people until it is too late to influence the process,” he says. “If you are going to tender out services you have to acknowledge that you will upset people. But councils need to involve service users in an adult way.”

Guide for service users when service providers might change, Learning Disability Alliance Scotland 

TUPE regulations

How one provider lifted morale at a time of change

Competitive tendering has forced social care providers to rethink their priorities. Kim Chambers (not her real name), a director of a learning disability provider, describes the impact that competitive tendering has had on how they deliver services. “At one point we were losing existing contracts when services were re-tendered and were not gaining new ones,” she says. “In order to ensure the organisation’s survival, we had to cut costs and make a number of redundancies to our core staff.”

Having laid off key staff and with others facing redundancy if the organisation failed to retain its contracts, Chambers says morale had reached an all-time low. “I had staff saying that they found it difficult to work in the office as there was so much crying going on,” she recalls. “Some of the staff we were making redundant were people who I had worked with for 10 to 15 years, and many were friends. Then we were making them redundant. It was a low point in my career.”

When an existing service is won by a new provider staff are transferred under TUPE regulations. While this gives staff some protection, Chambers say the winning and losing of contracts creates a process that feels like providers are playing musical chairs. The constant staffing changes had a destabilising impact on the workforce. “This has affected staff morale as the staff who worked for us didn’t want to leave us and usually the staff who came to us didn’t want to leave their previous employer.”

Faced with declining staff morale, Chambers decided to radically change the services they delivered. As well as streamlining costs the organisation focused on its strengths and chose to work with individuals with complex needs.

As a result of specialising, it became more successful at winning tenders. “Competitive tendering for services has made us change direction,” she says. “We used to provide most of our services in one borough and now we provide them in several boroughs.”

Chambers says the experience of tendering forced the organisation to look for fresh challenges, including setting up a social enterprise café. “Our service users could learn employment skills and the staff had a new and fun activity to focus on,” she says. “It lifted the mood of the whole organisation.”

Checklist for changing services

The Learning Disability Alliance Scotland’s guidelines set out what service users with learning disabilities should expect from their local authority when their services change:

● Information should be provided at the start of the process and in a form that is easy for service users to understand.

● Users should be offered a person-centred plans, which should be used to design the service plan and become part of any new contract to provide services.

● Individual service users should be involved in talks about what should happen to services and have someone to advocate for them.

● It should be easy for service users to comment on the process of changing services, which should made easy to understand.

● Users should be told why their service might cease to be delivered by the existing provider and informed about their options, including moving service.

● There should be a way for users to make formal complaints if they are unhappy with the process or with the new service.

Revolving door illustration by Matt Herring

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