Surviving in the new contracting landscape (NCVO Annual Conference 2012)


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More presentations from the NCVO Annual conference: will help you innovate in your work.

Fiona Sheil, Public Service Delivery Officer, NCVO

This expert-led workshop explores the future of contract design, what it means for funding public services and th e legal and cultural implications for organisations like yours. Public service contracting is becoming more diverse in both size and structure. With large contracts being broken up and work being passed down supply chains in sub-contracts, you see a number of challenges arising.

If you are involved in contracting , our panel of senior national charity finance directors and civil servants will help you navigate some of the key difficulties, including modelling cash-flows in supply chains and managing the sharing of risk between providers.

Published in: Health & Medicine, Business
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  • Sample workshop
  • Everything we do at Scope is about inspiring belief in the possible. And the thing we absolutely believe is possible is that by working together our society can change for the better. So that disabled people have the same opportunities as everyone else. That’s why we share stories of inspiring real life experiences, aspirations and ambitions of disabled people and their families or friends. The things they tell us they’d like to do in the future – the things we support them to achieve. Every day. It’s the reason were here.We see the person and we set no limit on potential. We believe in independence, inclusion and freedom to choose. Everyday life equality. No more. No less.Together we can create a better society
  • Surviving in the new contracting landscape (NCVO Annual Conference 2012)

    1. 1. PM6 Surviving in the new contracting landscape • Aisling Duffy, Chief Executive, Certitude • Chris Sherwood, Scope • Jim Clifford, Baker Tilly
    2. 2. Contracting for Personalised Outcomes Aisling Duffy Chief Executive 5 March 2012 A dynamic force in social care!
    3. 3. A little bit of background• Certitude is a social care group with a turnover of circa £25M• 630 staff delivering a range of support options for people with mental health needs and learning disabilities.• Support individuals with complex needs and profound and multiple disabilities• Currently operate mainly in Greater London with provider status in 14 local authority areas A dynamic force in social care!
    4. 4. • Income sources: 90% income from contracts So whats personal about that? A dynamic force in social care!
    5. 5. Our Guiding Principles:• Choice and control on all aspects of one’s life is the right of everyone we support now or in the future• Coproduction leads to better outcomes• Deliver value for money; will include restructuring services and delivery methods A dynamic force in social care!
    6. 6. What do we mean by Co-production?• Recognising people as assets• Building on peoples capabilities• Promoting mutuality and reciprocity• Developing peer support networks• Breaking down barriers between professionals and users• Facilitating rather than delivering NEF and NESTA A dynamic force in social care!
    7. 7. Current Landscape – our perspective• Contracts are not outcome focussed• Spot contracts do not achieve personalisation• Financial necessity requires us to think and act differently - cost cutting is increasingly the driver for change• We are well placed to offer solutions - commissioners need and welcome ideas• Radical new approaches are needed by all parts of the system• If we can get it right for those with the most complex needs then everything is possible A dynamic force in social care!
    8. 8. Why Current Commissioning and contracting doesn’tdeliver on outcomes?•An over focus on needs Joint needs assessments often focus purely on the need of a cohort often failingto identify their inherent or potential capacity and asset base•Lack of useful, reliable and up-to-date local intelligence This leads to localised services being designed and evidenced using nationaldata which often fails to identify with local needs and aspirations•Risk averse commissioning reduces opportunities for real innovation Often due to a lack of useful dialogue between providers and commissionersabout risk and unexamined anxieties•Commissioning and procurement as a reductive process This leads to localised services being designed and evidenced using nationaldata which often fails A dynamic force in social care!
    9. 9. Why Current Commissioning and contracting doesn’tdeliver on outcomes?•Short-term and static specifications and contracting Limited opportunities for services to change in order to meet shifting needsof cohorts and limited maintained dialogue between commissioners and providers•Collaboration is weak This leads to a lack of effective working between commissioners andproviders and between providers and providers•Orthodoxy to create economies of scale produces static markets This leads to commissioning not shaping supply chains or creating overlydominant prime providers• “We already do co-production” Misunderstanding of translation of the core principles of co-production oftenleads to a lack of meaningful engagement with people who use services, their carersand families A dynamic force in social care!
    10. 10. What commissioning approach is needed?• Assess needs, aspirations and assets Engages with people in meaningful ways in order to gather localised intelligence of needs, aspirations and assets• Outcomes and impacts are assessed dynamically, using diverse methods Measurements of the success of services is continually made using a range of touchpoints and feedback options to ensure that measurement is informed by individuals that include: people who use services, families, carers and front-line staff.• Accountability panels to challenge and spread co-production Accountability for upholding a co-production and collaborative led approach to commissioning will be distributed across panels made up to include: community members, people who use services, staff, service providers and commissioners. A dynamic force in social care!
    11. 11. What commissioning approach is needed?• Specifications are iterative and change over time to best meet the needs and assets By ensuring better community intelligence, better processes of design and smarter governance, commissioning will drive the options for supply• Co production principles define and assess all interactions All planning of processes and interactions are led by the 6 principles of co- production and success is assessed against these too.• Actively shapes markets By ensuring better community intelligence, better processes of design and smarter governance, commissioning drives the options for supply. A dynamic force in social care!
    12. 12. What are we trying?• Renegotiating Relationships• Piloting Individual Service Funds A dynamic force in social care!
    13. 13. Renegotiating Relationships - Contracts• Offering pathway solutions• Collaboration – alliance contracts• Specifications based on recovery outcomes• Agency to Agency time bank• Working Together for change – coproduction A dynamic force in social care!
    14. 14. Piloting Individual Service Funds• Tailoring support to people, including the money available;• Can be achieved within a range of contracting options including block arrangements• Offering the greatest possible choice and control to people in existing services;• Changing the relationship between budget recipient and service provider;• Better outcomes for people that take managed budgets. A dynamic force in social care!
    15. 15. Key features of an ISF (DH, 2011)• All or part of a personal budget held by a provider on an individuals behalf where the money is restricted for use on that person’s support and accounted for accordingly;• No specific tasks predetermined so that the personal budget holder is empowered to plan with the provider the who, how, where, when and what of any support provided;• Flexibility to roll money/support over into future weeks or months and to bank support for particular purposes;• Accompanied by written information that clearly explains the arrangement and confirms any management costs to come from the personal budget;• Portability so that the personal budget holder can choose to use the money in a different way or with a different provider. A dynamic force in social care!
    16. 16. Contractual implications• An ISF is not a contract – accountability and liability remains between the council and the provider unless it is a direct payment;• ISFs do not necessarily require different forms of contract, though there may be a need for contractual variations;• Variations relate to issues around subcontracting, banking of hours and “cash conversion”;• Spot contracts: the contract sum becomes the ISF;• Block contracts: the block is disaggregated on the basis of people’s respective needs into ISFs for each person;• Direct payments and personal budgets: the allocated sum becomes the ISF A dynamic force in social care!
    17. 17. What have we learned?• Working in partnership with supportive and innovative commissioners and other partners is key• Start from a clear view of what success looks like• Concentrate as much on the practice as the money• Be Risk aware not impotent• Share stories of success especially with staff• Do business differently – breakfast meetings work! A dynamic force in social care!
    18. 18. A dynamic force in social care!
    19. 19. Two Innovations for socialChangeChris Sherwood, Director ofInnovation & DevelopmentNCVO Annual Conference – 5thMarch 2012
    20. 20. Needs and drivers for change• External factors including cuts, localism, improved outcomes and public service reform are spurring us to action.• We are part of the sector wide Think Local, Act Personal initiative to promote personalisation.• Although our internal drivers are also strong. We have refocused ourselves as an organisation that is about social change.• We want to transform to meet the aspirations of our customers.• We see this as the innovation imperative.
    21. 21. Our services are undergoing significanttransformation SupportInformation Education Care
    22. 22. Disability Works UK• Scope is a founding member of DWUK. We are one of 8 different specialist disability employment organisations who are working together including Leonard Cheshire Disability and MIND.• DWUK is a is a 2nd tier sub-contracting consortium Welfare to Work contracts.• DWUK delivers 11 Work Programme contracts across the UK.• Scope is the lead partner for a Work Programme contract in Sussex, Surrey and Kent working with Avanta.
    23. 23. Why does Scope need to collaborate?• Provides access to markets that we might not otherwise be able to compete in.• Maximises our power in those markets by working with like minded organisations.• National reach combined with local delivery.• Allows us to share risk through coordinated approach and shared resources.• Achieve economies of scale by maximising the resources and capacity within the consortium.• Share learning and insight to improve practice.
    24. 24. Why does Scope need social investment?Investing in campaigns, advocacy and support services• Whilst its impact on the lives of disabled people and theirfamilies is significant, our crucial support and advocacy workdoes not generate a direct revenue, so requires 100% grantfunding.Investing in new direct services• Those services that need pump priming but can be sustainablein the long term. Could use a combination of donations, softloans and commercial loans.Investing in income generation and profile raising• We need loans to fund areas of our work that can afford to paya small return e.g. new retail outlets or donor acquisition.• This an area where we think bonds will be most applicable.
    25. 25. The Scope Bond Programme• A scalable, re-usable way of generating large amounts of social investment at varying yields and terms.• £20M program (in practice limited to £10M outstanding debt).• Listed on EURO (MTF) stock exchange.• Unsecured.• Investment decision based on ‘Scope as investible proposition’ e.g. • £29M fixed assets; • £9M reserves; • £4M surplus on £100M p.a turnover for last two years.
    26. 26. The First Tranche • £2M • 3 year maturity • 2% yield • Invested in income generating activities • Subsequent tranches invested in direct service delivery e.g. our parent befriending service Face 2 Face and paying higher yield
    27. 27. Final thoughts“Gentlemen, we have run outof money. It is time to startthinking.”Sir Ernest Rutherford
    28. 28. Any questions?
    29. 29. Jim Clifford +44 7860 386 081Social Impact Bonds in Public Commissioned Services Presentation to NCVO Conference 2012 (…with thanks to CVAA and PACT…..)
    30. 30. Social Impact Bonds in Public CommissionedServices • Payment by results models • Social Finance and the emerging SIB • Collaboration and Risk sharing • Funder markets 32
    31. 31. Payment by Results • Why PBR ? • Economic trade • Meaningful measures • “Informed” Output Inputs to Activities to Outputs to Outcomes to Impacts
    32. 32. Social Finance and the emerging SIB •Issuer defines terms •Multi-party funding; same terms •Application for specified social purposes •Investor reward balance
    33. 33. 3-DTypology of SIB-style funding.... Bridging to PBR Regular or With deferred profits Capital No interest Variable Special interest Fixed donors interest Repayable Equity Permanent Listed (regular or risk capital bullet)
    34. 34. Collaboration and risk-sharing •Risk dumping ? •Risk trading? •Risk arbitrage ? those who can..
    35. 35. Funder markets Match the project to the funder market: • Public funds • Third Sector • Corporates • Individuals THINK...... • Family offices • Project • Provider • Purpose • Presentation
    36. 36. Questions