26.06.17
Innovation in commissioning services
Source: PSE Jun/Jul 17
Malcolm Harbour CBE, who wrote Parliament’s first report on innovation in public procurement in 2008 and now chairs the LGA expert group on this subject, justifies the need to integrate commissioning into innovative procurement and identifies existing cases of best practice.
This is the third article in a PSE series (see Dec/Jan 17 and Feb/Mar 17 for the first two) inspired by the LGA expert group that will release a report later this year. Previous articles set out the opportunities available for reshaping procurement by embedding innovative approaches. Centred around the Industrial Strategy Green Paper, government was strongly advised to embrace the innovative potential of public procurement.
The government response to the Green Paper has now been delayed until after the general election. By the time this article is published, we should have a clear direction of travel. If the Conservatives are re-elected, it is evident from their manifesto that delivering the Industrial Strategy will be a priority. Moreover, it states: “We will make each local enterprise partnership and combined authority responsible for co-ordinating their own local industrial strategy in alignment with our national industrial strategy.” Innovative procurement initiatives would be a powerful way for local authorities to be deeply engaged in this ‘alignment’.
Embracing service delivery in innovation policy
One of the key findings of the expert group is that service commissioning must be fully integrated into innovative procurement. New technologies, especially digital, will often be central to innovation. But setting the desired outcome must be at the forefront, and the technology then developed for optimum delivery. Commissioners must be wary of ‘solutions in search of a problem’.
There is significant innovation already embodied in service commissioning. This is often driven by the challenges of delivering ‘Social Value’ and the ‘Social Care Act’. It is crucial for local government that service innovation is linked to the development of innovative local economies and part of a local ‘industrial strategy’.
Social care providers now have new market-shaping requirements for service commissioning embedded in their duties. These are an exact counterpart to technology contests for the supply of goods or services, central in pre-commercial procurement, to develop new systems and procedures evolving from a market-shaping study.
There is a clear case for integrating existing policy requirements for service delivery with development of the techniques and competences needed to deliver them.
Durham’s Smart County
Innovative procurement offers great opportunities to engage citizens and local businesses in identifying unmet needs and offering solutions. Many councils have energetic economic development hubs promoting their areas to innovative companies. Their skills can be engaged in encouraging these companies to develop their innovations as council suppliers.
A good example of this thinking can be seen in Durham. The county council has just placed the first pre-procurement contracts in its Smart County programme, which integrates economic development with meeting local societal needs. The projects to be tackled were identified by a wide-ranging consultation involving citizens, the third sector and business. Companies tendered solutions to alleviate the healthcare causes and consequences of social isolation. The county’s economic development arm, Business Durham, is working closely with the innovators funded to produce demonstrators. It will also help those with promising ideas that the council has not adopted to develop other opportunities.
Shared needs and shared solutions
Public consultations on unmet needs are likely to expose many similar demands from different localities. Sharing these ideas for service innovation then opens the way to more joint procurement contests and the deployment of common solutions.
The LGA expert group highlighted a European health project which delivered a substantial report consolidating a wide range of unmet needs across an international network of care providers. The participants plan to use these shared needs and develop joint pre-commercial procurement for e-health solutions. The unmet needs report is publicly available, so they hope that new consortium participants can assess their own needs and become collaborators.
A strong recommendation of the LGA group is the encouragement of more best practice sharing networks to stimulate joint development and deployment of innovative service solutions.
FOR MORE INFORMATION
W: www.local.gov.uk