Agenda item

(1)       The Chairman welcomed Sean and Stephen to the meeting and invited them to outline their roles and to answer questions from the Committee.

(2)       Sean stated that he had been the Chief Executive of CXK for the past three and a half years, this organisation had previously been called Connexions Kent and Medway.  This organisation had a long established relationship in Kent for delivering services firstly under GOSE (Government Office for the South East) and under contract to KCC from 2008.  Since 2012 CXK had procured contracts through the early intervention framework e.g. Parenting Services, Health & Wellbeing Services and a number of youth services e.g. detached youth service work. CXK merged with KCFN in April 2013 and are involved in a voluntary sector consortium delivering services to KCC. 

(3)       Stephen explained that both CXK and KCFN had similar backgrounds, KCFN was previously the Children’s Fund.  Kent was one of only two local authorities who had created a legacy from the Children’s Fund.  KCFN primarily contracted for participation and play work but had grown beyond that and had managed to grow services which had been a challenge in a recession.   KCFN recognised that they needed to work closer with Connexions and therefore formed a partnership. Both of these organisations were able to offer family based services which complemented each other, KCFN tended to focus on the younger age group whereas CXK focused on young people and adults.

(4)       Sean stated that CXK had obtained charitable status in 2008 and from that point they diversified their portfolio and aimed to provide a holistic offer around the family and supporting young people in readiness for training or the work market.

(5)       Stephen confirmed that both organisations had moved away from grant funding streams to commissioning, and had looked at how they could maximise their work in this environment.

Question – The services that you provide are discretionary?

(6)       Stephen stated that if local authorities focused solely on their statutory duty then they would be unsustainable as they would only be reacting to what was going wrong. It was essential that local authorities focused on the preventative agenda and there were cost savings to be made by local authorities from early intervention.

(7)       Sean explained that CXK are commissioned providers for KCC, some services are discretionary and some form part of a statutory duty. For example specifically in the Connexions Contract we undertake the Councils statutory duty to track, record and report to the DFE on the activities of young people aged 16-18  One of the challenges was that there was no clear barometer regarding statutory provision i.e. what and how much. 

Question – Why do you think that KCC not take a holistic approach to commissioning?

(8)       .Sean expressed the view that KCC did not have a mature commissioning process.  Officers needed to understand that they can explore beyond the specification in order to get innovation and creativity as well as accountability from commissioned services.  We supply a response to your tender based on what is in the specification there is no opportunity for us to explore innovation it is purely a paper exercise, we believe that this is a missed opportunity for KCC.  Additionally there was also the issue of KCC retaining part or all services in house as well as commissioning. If KCC scoped to commission the whole service they would more likely achieve a keener price and avoid duplication of effort. Often in procurement there was a presumption that you have to retain something in house this is especially the case in Kent.  There is a view that in house provision is needed for checks and balances, but this does generate additional costs. Stephen stated that a poor specification equalled poor commissioning.

Question - In relation to mental health services for children and young people there are different providers across the 4 tiers of the service, which must make it difficult to know where the boundaries are, do you get involved in looking at the big picture and specification to make sure that there is clear accountability across these boundaries?

(9)       Sean stated that the Sussex Partnership (who were responsible for the tier 2 and 3 CAMH services in Kent) negotiated and agreed with CXK (who provided tier 1 - 2 services) the measure for the type of referral i.e. tier 1 to tier 2.  We agreed that it would depend on whether a long term intervention was required in which case it would be the tier 2, if it was short term then it would be a tier 1 CXK intervention, this had not been worked out by the commissioners but by the two organisations delivering the services. There had been two separate tenders for what should be a seamless service.

Question – Was the commissioning for the CAMHs service good?

(10)     Stephen stated that he had seen better examples from across the country where successful commissioning of CAMHS had taken place.

Question – What is your perception of this?

(11)     Stephen stated that a restart of the CAMHservice needed to take place in order to completely restructure the service, the service now provided by CXK (Young Healthy Minds) did not previously exist.   Once the best provider had been identified then there should be an open discussion regarding the redesign and integration of the two services.  There were challenges regarding the specification for the service, for example in relation to the Common Assessment Framework (CAF) which became the means of accessing tier 1 and 2 services.  CXK currently do not have waiting lists over 6 weeks.  This service needed time to beddown, the 3 year contract should have been 5 years to give it time to do this, with a 3 year contract they would only be getting to grips with the service when it is time to retender a new contract. 

(12)     Sean explained that it was necessary to look at the quality of the CAHM service prior to the commissioning, e.g. how many individuals are delivering that service now who were previously engaged to deliver it?  Have the Sussex Partnership been set up to fail? Are their practitioners and practices that need to change or be managed out? One of the things that CXK look at when we are considering whether to bid for a contract was what is the current quality of the service and what value could CXK add and what judgements would we have to make to turn the service from good to excellent.  The Sussex Partnership were not working to fail but there was a need for additional measures to be put into place.  There is an immature market in Kent from what has gone on before, only part of it is a commissioning issue the prime issue  is a whole system issue.

Question – In relation to commissioning if there is a problem with the current service there is likely to be problems for the new providers at the start of the contract, do you have any suggestions as to how the time for the new providers to turn the service around can be made as short as possible?

(13)     Stephen suggested that when running a procurement exercise, potential providers should be identified and the opportunity taken to speak to them about the service and their suggestions for innovations.

Question - This process is followed for Highways contracts but it is not consistent across KCC do you agree?

(14)     Sean stated that every tender in Kent for people related services was between 1 – 3 years in length, this did not engender innovation or investment on the part of the provider.

Question – Do these contracts have an automatic extension if you achieve a set threshold?

(15)     Sean replied that this was never the case for people related services, there was however the opportunity to negotiate an extension.

Question – You seem to be suggesting that contacts should be for longer than 3 years?  Do you see signs that the market is growing up and will this develop organically?

(16)     Sean stated that the procurement framework put out by KCC two years ago was poor.  He questioned the purpose of suppliers being part of a framework.  KCC’s specifications asked for outcomes, not innovations. Providers were measured on cost of delivering as opposed to quality of outcomes.  We ask for more 3 year contracts and the framework should be set so that in the submission you could see where the value added would be, this is not just an issue with Kent, the public sector tenders tend to have a closed procurement process as opposed to the private sector. The way that tenders are let predominately supports the single supplier.  When we bid we look at the supply chain and look for complementary and additional skills sets that are not within our organisation.  In KCC contracts there is no reference to the supply chain.  We have brokered and delivered under a consortium for other contracts very successfully to extend the outcome that we would other wise be able to achieve as a single organisation.

(17)     Stephen said that if KCC wanted to invoke change within the market then they needed to be candid about the current situation and their ambitions for the future.  The voluntary sector faces huge challenges, it was shrinking in size as the pot of money was shrinking.  It was important to look at how to drive innovation.  The procurement framework was a half-hearted attempt as it locked out new emerging providers for years to come.

Question – Having successfully bid for a large number of services in Kent are you able to have an open and honest conversation with commissioners in Kent.

(18)     Sean referred to the youth service which was the best example of dynamic purchasing by KCC,

(19)     Stephen expressed the view that there should be a central procurement process across the whole of KCC, there was a need for consistent professional procurement.  It was important for KCC to take this approach as it became a commissioning authority.  It was about working with providers, establishing long term relationship and influencing the market place.  KCC spends over £2 billion, it should use it’s spend to influence the market place and should avoid in-house duplication of commissioned services.

(20)     Sean stated that senior KCC officers did not know KCC contract standing orders which are on KCC’s website.  What was not on KCC’s website was what the funding threshold is.  KCC is exposing itself to risk by allowing officers to be involved with the procurement process who are not aware of KCC contact standing orders, and are not following KCC procurement process. 

Question – What can KCC do to improve this process?

(21)     Stephen stated that KCC needed to engage with the market more. Sean stated that there was a need to look at how to incorporate innovation before finalising the specification.  This would give KCC the opportunity to see the maturity of the market that it wanted to engage with, it was important to look at what contractors could offer.

(22)     Sean suggested that if funding was a driver then don’t set a specification that scores finance at 40%, be open and transparent about it.  Also if funding is a driver don’t put contracts out for 3 years, a longer term is needed if there is going to be any added value delivered.  Contracts should be 5 year with the option to review up to 10 years. If KCC spent £20m over 10 years we would be able to go to the banks and social investment funds.  We can draw in £5m of additional revenue on the basis that we have got an ongoing contract.  At the moment we don’t go to the social investment funds because they want us to have contracts that are longer than 3 years.  There is a fantastic market opportunity that KCC is not taking advantage of.

(23)     Stephen stated that he and Sean loved Kent and spent most of their voluntary time supporting KCC via the various Boards that they sat on. They wanted to act as a critical friend in the best interests of the people of Kent as they believed that Kent had a lot to offer.

(24)     Sean explained another issue was TUPE transfers.  It cost CXK 15% extra for each KCC employee that was TUPE’d compared to their own employees the majority of this was additional pension costs.  The terms of KCC’s contract require them to put in place a bond for the pension of TUPE’d  employees.  They were one of the few employers required to do this who are in credit and yet you were still ask us to continue to pay. This money that we are putting into this bond could go to help a young person.  There was no risk KCC in relation to CXK not meeting the pension costs as the initial bond that was paid would cover this.

Question – KCC is accountable to the public, you are a charitable organisation that is trying to provide the best level of service how can we improve the current situation?

(25)     Stephen stated that the key to overcoming the financial challenges was the vibrant market. There were too many voluntary bodies and this had to change and we need to work this out together so that streamlining and rationalisation was in the best interests of beneficiaries.

(26)     Sean stated that in their written response there was an element of uncertainty around the independence of the voluntary sector.  There were voluntary sector organisations that were set up as brokers for other voluntary sector organisations, e.g. VAWK.  What has happened in the last two years is that because the market has got smaller these brokering organisations are now tendering and delivering work and are therefore not independent of the market.  KCC should ensure that there was an element of transparency in the market. 

(27)     Sean explained that the size of KCC and the budget funding that it has could be used to get better value in the supply chain which can be added into the commissioning process, and used to drive down prices. If there was a better procurement process we would be able to deliver a better service for you.

(28)     Sean acknowledged that KCC needed to make £269m in savings, he stated that in his experience when organisations were in a tough situation they were more likely to play safe, they had seen signs of this in KCC officers.  The reduction in the budget to CXK as a commissioned organisation was disproportionate to the reduction in internal services.  When CXK were first commissioned by KCC their contract was £12m, next year it will be £1.3 which was a 70% reduction in 3 years (although there were some statutory changes that had impacted upon this), we do not see the same reduction in internally managed services. 

(29)     Sean asked Members to consider what proportion of turnover of KCC was commissioned vs internally delivered? Also what proportion of frontline worker costs vs management and support overhead. CXK work on a 5% ratio of their Management staff to front line staff.?  We can’t see this information transparently within your budget.

(30)     Stephen stated that KCC was brave in terms of policy and strategy from the Leader, this needs to be matched by the culture and behaviour of officers.  There was a contradiction between the statement that KCC was moving to a commissioning authority and officers pulling services in house.  He believe that consideration should be given to moving commissioning and procurement away from the directorate that delivers the service so that there can be no cherry picking of services that are easy to deliver in-house.

(31)     Sean and Stephen thanked the Committee for the opportunity to come to the meeting and express their views in a free and frank way.  They stated that they believed passionately in doing the right thing for Kent families and young people to improve their outcomes. They viewed this as an emerging market and there was the need for KCC officers to understand what the voluntary sector can do well.

(32)     The Chairman thanked Sean and Stephen for helping the Committee with their work.