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Commissioning and the lessons from the collapse of Carillion

17 Jan 2018 - 16:56 by Nigel Rose

Carillion Crane from Macc's WindowThe collapse of Carillion is just the latest in a long line of failures by private companies to carry out public services in an effective and cost effective manner. Does anybody really believe, anymore, that privatising the railways or electricity or water, was a good idea?

This failure casts yet more doubt on the idea of commissioning in health and social care. Circle simply gave back a contract to run a Hinchingbrooke Hospital when it couldn’t make a profit, yet the privatisation of the NHS continues apace, accelerated by a recent change in procurement rules that forces commissioners to put out more services to tender.

The reality is that there is no evidence that the commissioner-provider split works. It is taken as a given that competition is good, but there is no proof. The anecdotal evidence of good outcomes is balanced by a much larger series of anecdotes about how poorly commissioning is carried out and the poor results that follow. A recently retired health commissioner spoke to me about how her and her colleagues were given areas of work that they knew nothing about, and then were asked to lead on the area and write specifications for multi-million pound tenders. They were expected to become experts overnight. Most of it seemed pointless bureaucracy to her, much like the recent procurement of the Local Care Organisation, where there was only ever one bidder. Hundreds of hours of commissioner and provider time wasted.

The effect of commissioning on the voluntary sector has been and is chilling. Some voluntary sector organisations (if they still really warrant the description) have become massive public service providers and are still increasing in size (according to NCVO), while small voluntary sector organisations get less and less money. Is it possible to maintain one’s values and vision when the main activity is carrying out contracts for other people? Is the point of voluntary sector organisations to carry out public services more cheaply than the public sector? My own experience of working in an organisation with large public sector contracts was that it tore me apart, trying to keep to my values, whilst at the same time appear to be meeting the contractual conditions.

People have argued that Brexit will allow us to have our own procurement rules and protect the NHS whilst conveniently forgetting that it was the British government who argued for the freeing of the market for health and social care within Europe. Other countries were far less keen to tender out public services.
Will this latest catastrophic failure in the commissioning provider split change the underlying orthodoxy of competition and lowest bidder wins? It seems unlikely but perhaps some of the institutions impacted by the collapse will count the cost of contracting out, take direct action and return to employing their own staff.

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