The nature of commissioning and outsourcing

In broad terms, ‘commissioning’ refers to the process of the planning and strategic purchasing of services. While there are many models available, they all fundamentally break down into four key areas:

• • analysis: understanding the value and purpose of the agencies involved, the needs they must address, and the environment in which they operate;

• • planning: identifying the gaps between what is needed and what is available, then deciding how these gaps will be addressed;

• • doing: securing services and ensuring they are delivered as planned; and

• • reviewing: monitoring the impact of services and ensuring future commissioning activities take review findings into account.

The danger is that these complex activities are, in practice, reduced to a competitive tendering activity, often framed by a rigid set of costed outputs and complex contract conditions. As seen in Chapter 2, local authorities were required to radically shift their role from direct provision to commissioning. In so doing, they stepped into an unfamiliar world, one that is normally found in commercial business, such as sourcing providers, negotiating contracts and monitoring arrangements. The research conducted in the 1990s by Wistow et al (1994, 1996) revealed what a culture shock this was at the time for local councillors, officers and front-line staff, who were more accustomed to a traditional ‘welfare state’ model. It might be expected that since that time, there would be greater familiarity with the task and less resistance to the principle but this is not necessarily the case.

Today, around a third of all public expenditure is outsourced via ‘procurement’ (Pritchard and Lasko-Skinner, 2019) even though the record of achievement is, at best, mixed. The most spectacular recent failure was the collapse of the outsourcing giant Carillion, which had managed services across education, the NHS, prison services and transport. Other outsourced public services that have run into difficulty include the probation service, the prison service, rail franchising, the forensic science service, Learn Direct, court translation services, housing for asylum seekers, welfare benefit assessment, free schools and academies, and the NHS. Overall, evidence of successful outsourcing is remarkably thin on the ground.