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Market Management – West Midlands Children’s Commissioning Partnership

Market Management – West Midlands Children’s Commissioning Partnership. Richard Keble Head of Commissioning and Quality Children’s Services Directorate Worcestershire County Council. Context – the Place. 14 West Midlands LA’s Population of 5.27m people of whom 19.4% are age 0-19

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Market Management – West Midlands Children’s Commissioning Partnership

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  1. Market Management – West Midlands Children’s Commissioning Partnership Richard Keble Head of Commissioning and Quality Children’s Services Directorate Worcestershire County Council

  2. Context – the Place • 14 West Midlands LA’s • Population of 5.27m people of whom 19.4% are age 0-19 • Long partnership history between LA’s

  3. Context – the LAC population • Total numbers of Looked after Children = 6,910 in 2004 to 7,430 in 2008 an increase of 7.5% contrary to the national trend of a 2.8% reduction • The West Midlands represents 12.5% of the total Looked after children’s population in England • Of the 14 authorities in the West Midlands 9 or 64% have increased their Looked after population over the last 4 years • Percentage of children looked after with 3 or more placement breakdowns have decreased from 13.7% in 2004 to 12.2% in 2008 an 11% reduction

  4. Context – the Market • 85 different IFAs providing 1330 placements at cost of over £50m per annum – nationally represents 29% of population • 150 different independent residential care homes providing 420 placements at cost of over £60m per annum

  5. Context – ‘traditional’ market management • Social worker needs a placements [ill-defined needs and outcomes] • In-house fostering / residential says yes or no vacancy • If no, SW rings up known provider or someone advertising in social work press • Various means of approving funding, often after placement made

  6. The Issue More children in care, more of whom are being placed with independent providers, whose quality is more variable than in-house [or so we believe] and at [significantly ?] greater cost.

  7. Strategic Approach [1] Develop standardised contracts, consistent relationship with providers and introduce some quality assurance [2] Understand the market [3] Procure more effectively from PVI sector, matching needs to placement and cost [4] Manage PVI cost [5] Undertake cost analysis

  8. Outputs [1] Built on existing commissioner – provider partnership - WMCCP [2] Standard contracts, lead authority for each provider [Contracts Officer Group] [3] Secured Improvement and Efficiency Partnership funding [4] High level market intelligence

  9. Outputs [2] [5] DCSF ‘Commissioning Pilot’ funding for a database [6] Introduce regional price review process for PVI sector [7] business case developed for cost analysis

  10. Standard Contracts Benefits to Commissioners Benefits to Providers Only have to deal with one LA in the region More level playing field in PVI sector Lower administrative costs • Better quality control • Knowledge about providers shared across the region • Less opportunity for providers to play one LA off against the other

  11. Database ‘Story’ • DCSF Commissioning Pilot • Partnership with Commensura • Model was rejected by WMCCP • DCSF strongly encouraged purchase of existing database from other region • Approach again rejected by WMCCP • Proper procurement – lead to a new entrant [Pengower] • 5 year contract within grant, no extra cost to LA’s, better and more flexible product than others

  12. Database ‘figures’ • Live – June 2009 • 206 providers registered • 1331 different placements • 266 reported vacancies • 47 vacancies within 20 miles of here ranging from £750 pw to £4,200 pw • Highest database take up by providers in country [40%] – NCA members

  13. Database Benefits to Commissioners Benefits to Providers Transparency about LA procurement practices More level playing field in PVI sector, and potentially the whole sector Allows new entrants to market to compete more evenly Lower administrative costs Lower /nil advertising costs Market intelligence – where to diversify, which gaps to fill • Procurement tool • Sharper procurement practice • Reduced procurement costs • Compare with in-house • Drive down spot purchase cost by opening competition • Market intelligence - inform future commissioning • Supports s 22[g] of CA89 ‘sufficiency duty’

  14. Price Review ‘story’ • Historically agreed a formula for annual uplifts, but not all LA’s ‘stuck’ to this • National contract included uplift clause • 2008-11 efficiencies agenda • Region decided to hold 0% uplift with appeal • Successful, so followed by ‘price review process’

  15. Price Review Benefits to Commissioners Benefits to Providers [Depends who you are!] Hard pressed, higher quality providers rewarded Greater stability of pricing across region • Share efficiencies • Drive down cost • Increase understanding of pricing structure • Compare with in-house [over-time] • Increase market competitiveness • Link outcomes and quality to cost

  16. Lessons • Commissioners should commission • Commissioners should be ‘intelligent’ • Partnership with providers is necessary, but the boundaries need to be defined • The right tone in the partnership with providers, it can be constructive • Good procurement can pay dividends • Use regional collective power

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