Faulty by design.

The state of public-service commissioning.

If a public policy intervention reaches near perfect results, it's probably because it made up its own grading scheme. When the Troubled Families programme’s infamous 99 per cent success rate was called into question by the publication of an independent evaluation, it highlighted some of the issues with public-sector commissioning, such as ill-defined outcomes. Reform’s latest report, Faulty by design. The state of public-service commissioning., published today, seeks to shed light on the successes and failures of the current framework and serves as a case for change from the current system.

What is commissioning ? 

Commissioning refers to the design, purchase and evaluation of public services. It is most associated with services in which there is a split between the purchaser (government) and the provider (private companies, charities or other public-sector bodies) (see Figure 1).

Its goal is essentially to try and recreate market mechanisms within the public sector to increase choice, competition and deliver value-for-money.

Is commissioning achieving outcomes for users?

Outcomes-based commissioning is a specific type of approach to the planning and contracting of public services which shifts the emphasis from what services a provider will offer, to the goals and objectives they seek for a given population. Commissioners are failing to achieve this for a host of reasons, however. 

          (a) There is an over focus on measuring activities

There is greater focus on measuring outputs (such as number of hospital appointments) and inputs (the cost of each appointment), rather than the outcome (the impact of care on the service user).

          (b) Cultural and skills barriers

Commissioning for outcomes implies being innovative and commissioners too often revert to a mentality of: "You can't be sacked for not being inventive enough". Commissioners are relatively pessimistic about their ability to design complex, outcomes-based contracts (see Figure 2).

          (c) Lack of evidence

Outcomes-based commissioning is also limited by a lack of understanding of 'what works' in a range of policy areas. Technically, evaluating the impact of policy is not easy. There are many effects and establishing a clear causal link between a policy intervention and the outcome it produces is not straightforward.

A broken puzzle:
fragmented service provision

The current commissioning framework stands in sharp contrast with the Government's aim of greater integration.

          o State of current funding system: how many lines can you count?

The funding flows between central government and local commissioning bodies do not incentivise the commissioners to join-up provision (see Figure 3).

          o What's the impact of fragmentation?

               (a) It fails people with severe and multiple disadvantage (SMD)

About 586,000 people belong to the SMD group, which means that they face one or more problems caused by crime, homelessness and substance misuse. These are the most vulnerable group of service users (see Figure 4 for the cost of providing services) and would benefit the most from integrated service delivery, where, for example, a GP could help with debt problems linked to mental ill-health.

These gaps are created by poor information sharing between services, ambiguities in terms accountability for service delivery and differing priorities. The human cost of the gaps in service provision can be truly severe. Lack of information sharing and silo-working between organisations at a local level have been identified as some of the causes the failure to identify cases of child abuse.

               (c) It creates duplication of services

In 2010, the Treasury found that £100 billion had been wasted on duplicated services. A prime example of service duplication is shown by Figure 5, below.

Both these programmes targeted similar groups, funded similar activities, yet were designed as separate initiatives.

               (d) It hampers a proper focus on prevention

Homelessness provides a prime example of how fragmented commissioning does not incentivise prevention and fails service users. Figure 6 illustrates the services that a person might have interactions with when they are about to become homeless. None of these services are incentivised to join forces and prevent this from happening.

Not tailored to local needs

Reform's research shows that the 'postcode lottery’ already exists on the ground with for example varying healthcare outcomes as shown by Figure 7, despite having highly centralised services.

These differences in terms of outcomes at a local-level strongly encourage the creation of a model that better caters to these varying local needs.

Next steps

The current commissioning framework falls short of its stated aims. It fails to focus on outcomes, it is fragmented and does not cater to varying local needs. Having identified the faults in the current system, Reform's next paper in this series will seek to provide a solution to these.

Read the full report at: