nef (the new economics foundation) sustainable procurement and commissioning - overview elizabeth...
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nef (the new economics foundation)
Sustainable Procurement and Commissioning - overview
Elizabeth Cox & Josh Ryan-Collins
Whole Life Costing Working Group 7th October 2008
nef (the new economics foundation)
Plan for the day
• 11.00 Introductions
• 11.10 Overview of nef sustainable procurement work (Josh)
• 12.10 CAA response (Liz)
• 12.45 Lunch
• 1.30 Valuing – SROI (Eilis)
• 2.00 Discussion/Summary
nef (the new economics foundation)
Defining VfM– Value for money is defined as the optimum combination of whole-of-life costs and
quality (or fitness for purpose) of the good or service to meet the user’s requirement. Value for money is not the choice of goods and services based on the lowest cost bid.
• HM Treasury (2006) Value for money guidance, p.7. [13 August 2008]
– In principle, any appraisal should take account of all benefits to the UK. This means that, as well as taking into account the direct effects of interventions, the wider effects on other areas of the economy should also be considered.
• HM Treasury (2003) Green Book, p.2. [25 August 2008]
– Wider social and environmental costs and benefits for which there is no market price also need to be brought into any assessment. They will often be more difficult to assess but are often important and should not be ignored simply because they cannot easily be costed.
• Ibid p.19.
nef (the new economics foundation)
Challenges for procurement officers
• Narrow interpretation of Gershon & VfM:– Cashable v ‘non-cashable’– Price > ‘whole life costing’
• Silos - Information on budgets and budget holders
• Aggregation• But remember: you are free to determine what
you are buying – you can contract for ‘the construction of a sports hall’ or you can contract for ‘the construction of a community centre and the regeneration of the community’
nef (the new economics foundation)
Resources
People (time & skills)
Inputs Outputs
Service & wider Outcomes (Place Shaping)
Money £s
Environment Environmental
Economic
Social
Longer term public benefit (3 -5 years)
coproduction
Resources Inputs Outputs Service level Ou tcomes Money £s
Cost savings - ANNUAL
Value for Money – narrow and real versions
nef (the new economics foundation)
Activities, outputs and outcomesActivities
The intervention provided. E.g. a training course.
Outputs
Direct and tangible products from the activity; for example the number of people trained, or the number of computers recycled.
Outcomes
Changes that occur for stakeholders as a result of the activity; for example, a new job, improved quality of life or increased community cohesion.
Both ‘hard’ and ‘soft’ outcomes can, and should, be valued
nef (the new economics foundation)
1.
Activity
2.
Output
3.
Service level outcomes
4.
Camden Community outcomes
–social–economic–environment
5.
Value–Quantitative–Qualitative–Monetizeable
Where value accrues:- To Service- Camden wide- central government
How to procure locally:1. Sustainable Commissioning model
Community strategy & Corporate priorities
Commissioner & service user priorities
National outcome frameworks
nef (the new economics foundation)
Activity Output Service level outcome
Camden Community outcome
Value
Designs and prints stationary
Recycles paper
Provides training, supported employment, therapeutic support and paid work to people recovering from mental health problems in Camden
Council stationary
No. hours of training, supported employment, therapeutic support& paid work
High quality stationary and recycled paper
[Improved mental health]
Local jobs created
Reduced Waste
Reduced worklessness & economic inactivity
Increasing no. of people with mental problems into work & staying in work
More vulnerable adults living’ independently
No. local jobs (supply chain monitoring)
Landfill Savings
[Preventative savings]
Costs of tenancy failure £2,000
Council staffed hostel £484 per week; local authority group home £202
Complex need placements - £1,200 per week
Incapacity benefit: £4,379 per claimant per year.
Two ways of seeing value – St James’ House social firm
nef (the new economics foundation)
www.homelessoutcomes.org.ukTracking outcomes –
Outcomes Star
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Relating savings to outcomes star
nef (the new economics foundation)
Camden Community Strategy• ‘…increase local business activity’• ‘…increasing no. of disabled people &
people with mental problems into work & staying in work’
• ‘…sustain local economic services such as post-offices’
• ‘Reduce energy usage’
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Islington Community Strategy• ‘Explore new ways of engaging with local
businesses’ (p30)
• ‘Develop initiatives to tackle and adapt to the impact of climate change and raise awareness of the issues’ (p30)
• ‘Reduce energy usage, reduce waste and promote walking and cycling’ (p30)
nef (the new economics foundation)
National Indicators
• NI 152 Working age people on out of work benefits
• NI 166 Average earnings of employees in the area
• NI 171 VAT registration rate
• NI 172 VAT registered businesses in the area showing growth
nef (the new economics foundation)
Construction – Norfolk district council
1 Local firm 2 Non-local firm
Round 1 £ 72,000 £ 120,000Round 2 £ 57,600 £ 20,400Round 3 £ 24,980 £ 6,760Total £ 154,580 £ 147,160
LM3 2.15 1.23
The local multiplier (LM3) effect
nef (the new economics foundation)
What is co-production
Produce: means - to make something or bring something into existence
Co: means - together; with in relation to services• active relationship between staff and service
users as co-workersin relation to communities• engaging the assets that exist within
communities to grow the core economy
nef (the new economics foundation)
What is co-production
• Investing in strategies that develop the emotional intelligence and capacity of local communities
• Devolving real responsibility, leadership and authority to ‘users’, and encouraging self-organisation rather than direction from above
• Offering participants a range of incentives which help to embed the key elements of reciprocity and mutuality
nef (the new economics foundation)
What isn’t co-production
Service user consultation
Informing people who use services
Service user involvement in service design
Representation on service boards and panels
Service users involvement in assessing services
nef (the new economics foundation)
What is co-productionProfessional designed
Professional
delivered
Service user designed
Service user
delivered
User self-help group
Traditional services
Expert Patient Programme
nef (the new economics foundation)
Reviewing Roles
Professionals as sole service planner
Service users/ community & professionals as co-planners
No professional input into service planning
Professionals as sole service delivers
Traditional professional service provision
Professional service provision - users and communities involved in planning and design
Professionals/ users/ communities as co-deliverers
User co-delivery of professionally designed services
Full user/ professional/ community co-production
User/ community delivery of services with little formal/ professional planning or design
Users/ communities as sole deliverers
User/ community delivery of professionally planned services
User/ community delivery of co-planned or co-designed services
Self-organised community provision
nef (the new economics foundation)
What is co-production
• Reducing or blurring the distinction between those who deliver and those who receive services, by reconfiguring the ways in which services are developed and delivered: services can be most effective when people get to act in both roles – as givers as well as receivers
• Allowing public service agencies to become catalysts and facilitators rather than simply providers
nef (the new economics foundation)
Getting impact in to the procurement process
nef (the new economics foundation)
Ask the right questions
• What role would you envisage for service users’ in the development and delivery of your service?
• How does your service identify and mobilise service users strengths?
• How would the contribution of service users, carers, family, peer group, neighbours and the wider community be measured or rewarded?
nef (the new economics foundation)
Guiding principles
• Recognising people as assets
• Valuing work differently
• Promoting reciprocity
• Building social networks
nef (the new economics foundation)
How to do it: Community Benefit Clauses
• "You can say in a contract that x% of jobs must go to the long-term unemployed, or new entrants to the labour market, or people needing vocational training. But you can't say that jobs must go to local people. That is the key… In reality, most - if not all - the jobs will go to local people or those from the surrounding area.
Mark Cook, Anthony Collins Solicitors
nef (the new economics foundation)
Raploch Urban Regeneration Company• Renewing deprived outer-city estate in Stirling• Demolishing 450 houses and building 900 new homes,
new roads & public squares• 10% of jobs to go to local people, with a target of 225 jobs• Contractors legally-bound to provide 5 apprenticeships,
10 jobs for semi-skilled operatives & 10 training places per year
nef (the new economics foundation)
Sustainable Communities Act• Local authorities are charged under the Sustainable
Communities Act to find new ways to support local enterprises to develop their capacity to provide sub-regional economic growth in respect to:– Local jobs and production within a 30 mile area;– More local and organic food;– Green energy within a 50 mile regional radius;– Provision of local services (eg. health, housing, banking, public
eating places, etc.)– Measures to increase mutual aid and community projects;– Measures to increase community health and well-being.
nef (the new economics foundation)
www.procurementcupboard.org.uk
nef (the new economics foundation)
Further information• josh.ryan-collins@neweconomics.org
• www.neweconomics.org.uk
• Fools Gold: How the 2012 Olympics is selling East London short, and a 10 point plan for a more positive local legacy
• Unintended Consequences: How the efficiency agenda erodes public services and a new public benefit model to restore them
• Public Spending for Public Benefit• Plugging the Leaks &The Money Trail• A Better Return: Setting the foundations for intelligent
commissioning to achieve value for money – I&DeA & OTS Third Sector Commissioning Programme
• Coproduction Manifesto
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