Agenda item

1.            The Chairman of the Select Committee welcomed the Chief Executive Officer of KCA,  Ryan Campbell, and the Director of Development and Marketing, KCA, Karen Tyrell, to the meeting.

2.            Ryan and Karen had received questions and themes that the Select Committee were investigating in preparation for the meeting.  A copy of their response was included in the papers and considered by the Select Committee.

3.            Ryan began by explaining that KCA was a registered charity that provided drug and alcohol misuse and mental health services.  KCA provided some mental health services in Kent but no longer provided adult and drug and alcohol services sincenew contracts were awarded to different providers.  KCA provided a greater proportion of services outside Kent.  He advised that the competitive market had worked in KCA’s favour and its business had doubled in size through expansion.

4.            Grants could be seen as providing voluntary organisations with an inbuilt predisposition not to have to change or innovate – which eventually restricts services.

5.            Ryan advised that KCA’s experiences with KCC and commissioning were pretty good – even when they not won contracts- and without issue regarding procurement processes.  There was a tendency among providers to consider the commissioners as being good if they won a contract or the commissioner had a problem with them if they are unsuccessful in gaining a contract.

6.            There was little public information on commissioning nationally; so unable to equate whether KCC, as a commissioner, was good or bad or cost effective at as no measurement. But commissioning is expensive for external organisations and for KCC.

7.            Commissioning can be expensive, the principle part of which was unproductive in time and expensive to resource.  For example from 5 bids tendered for may win one contract. Subsequently the funding lost in failed bids had to be recouped within those contracts won.   If there was a way that this process could be streamlined reducing the cost, money would be available for more projects in the community.

8.            Ryan suggested that there had been a general unpleasantness since 2006 regarding the competition for contracts in the voluntary sector. KCA had 3-6 year contracts, which meant that a third of its business was at risk every year which was stressful as always looking down the barrel of a gun.  For some smaller organisations this could equate to 100% of their funding and their continued existence.

9.            Statistically, KCA and every provider will lose contracts, therefore there was a fast turn around to win contracts to keep the organisation running.  With shorter contracts the reality is that staff were TUPED every few years so it was difficult to retain loyalty amongst frontline staff that are continually swapped between providers.  Equally, senior staff could lose their jobs if they cannot maintain business levels so it was difficult to keep them motivated. 

10.         Ryan said that when he started in the voluntary service there was a friendlier environment which saw shared information and best practice across organisations.  Now information was kept in-house and was closely guarded to ensure do not lose competitive edge - to keep or gain contracts. 

11.         This could be avoided with a change in process; if commissioners looked at having a more intelligent diverse approach.  There were models being trialled where the process decided which provider best suited to the requirements based rather than choosing the best proposed provider based on the quality of their bid.  Such a model is being trialled in Norfolk and other places.

12.         Ryan suggested that it would be helpful if decisions for awarding contracts were made with consideration for past performance. Good performance protection would increase workforce motivation - frontline staff would be assured they were doing a good job.

13.         Ryan suggested:

Ø  A mixture of long and short contracts would be better for smaller providers so that there was not a constant contract turnover over.

Ø  Longer contracts would mean continuity and a valued service.

Ø  Incentive and bonuses as at present only the opposite applies if you fail to perform money is taken or you lose the contract.  £5k would be a lot of money to a provider the size of KCA.

Ø  A standard Pre Qualification Questionnaire (PQQ).  He was unsure why case studies were included at that stage.

Ø  The commissioner could undertake real dialogue with prospective provider instead of relying on a paper submission – organisations can look amazing on paper – but where is the commissioner engagement with  service users, staff  and site visits

Ø  Why score contract price? Commissioners know what they want to spend –so should not be part of the award criteria. Contract price should be a given   can then focusses on what added value will get from the contract / question where the savings made would be used.

Ø  The commissioning process needed to be coordinated across the local authorities.  At present the commissioning process all took place in the same timescale i.e. in the summer and over the Christmas holidays.

Question – How much is (re)tendering or bidding for a new contract a balancing act?

14.         Ryan advised that KCA was constantly changing and developing its services.  With the different drivers such as new legislation providers needed to pitch their bids accordingly.  KCA’s was happy to state that it had very good services and challenged other providers to do better.

15.         Commissioning was better now than it had been in the past. When a provider was in a contractual arrangement it was difficult to be critical of the commissioner.  There needed to be a more grown up approach in communication and working relationships.

Question – Do you speak with commissioners?

16.         Yes, but not necessarily on commissioning or design of services usually contractual matters where could be a catch 22 if critical issues. Providers, like KCA, had a broader overview of many authorities practices some of who were very inexperienced.  So can alert to the pitfalls and common mistakes. It is right that we all want to improve services but reality is that many authorities are inexperienced in terms of their contractual knowledge or commissioning ability.

Question - Is Kent commissioning heading in the right direction?  

17.         KCA experience is:

Ø  the procurement and commissioning by KCC were standard and competent, but needed to look at more interesting models for commissioning.   

Ø  KCC’s used procurement as one of its cost cutting measures, which was handled well but was unusual when compared to other local authorities.

Ø  There was little information on financing commissioning

Ø  Family Intervention Service – new and politically visible service with lots of scrutiny and data prescriptive. This could be burdensome.

18.         KCA would like to be in the position to offer a wider range of benefits to the communities that it served but time had to be focused on meeting targets and only after those targets were reached could other possible activities be looked at and following the procurement process there was little money left for innovation.

Question – are there to many providers in the market?

19.         No, there are not too many providers in the market. Are seeing the consequence of changes to commissioning of contracts rather than grant giving. Tendency that smaller organisation are losing out, in reality if £20M organisation can cope with losing a percentage of contacts. If contract was 50 - 100% of your income, likelihood the organisation will cease trading and fold. Need to help those organisations you value, not just scoring removal.

Question – Would you favour longer contracts, but with agreement that there would be penalties if failed or didn’t perform?

20.         It is not straight forward as need a mixed portfolio of contracts of both short (two years) and long term (eight years). The three year cycle is difficult for both commissioners and providers, six years would allow opportunities for proper measurement of outcomes.   Stretch targets would be good and would welcome the idea of reward incentives from outcome based results.  Financial constraints such as the payment by results models have seen the loss of good quality providers.

Question – how maintain and manage client contact vs contract procurement / management?

21.         KCA had retained its personal connection with its clients despite the changeable environment.  Ryan and Karen considered that they were both still learning in terms of the voluntary organisation changeable environment.  Voluntary organisations were more professionally run with a focus on competition and staff performance which they considered an improvement.  One downside of this was; a loss of the opportunity to innovate from time to time and they were unsure how this could be overcome.  Organisations were now organised around contractual money.

Question – How can voluntary sector facilitate KCC learning?

22.         Ryan and Karen said that they were always willing to talk to local authorities regarding procurement.  There had been an organisational move from caring and sharing to focus on contractual needs – staff performances, competition and new business approaches. This has brought both improvements but a loss in innovation 

23.         Talking to KCC commissioners and politicians facilitated learning. For example the select committee provided such an environment which would inform the procurement process.

24.         Commissioners and providers need to engage before service are procured about what are the best outcomes and how best to commission them. Ryan suggested that there was willingness to talk but a lack of training in business management which did not sit naturally in the voluntary sector or local authorities.

25.         We need to understand together and work together.

26.              The Chairman and Members of the Select Committee thanked Ryan and Karen for attending the meeting.