Collaboration: The logical solution to pressures on Local Authorities

Collaboration definition – The action of working with someone to produce something. But what does it mean to collaborate when you are a large, public sector organisation with millions of pounds of spend and you’re trying to change cross-organisational working practices that affect the lives of thousands of local people? Barry Phelps, Head of Procurement at the London Borough of Haringey Council, spoke to us about collaboration, particularly the benefits it could bring for Local Authorities.

It’s clear that all Councils are under significant financial pressures, and nowhere is this more apparent than in London, where prices of care, housing and transport services are rising faster than in the rest of the country and the marketplace of providers of these services is limited. It’s also clear that these budget pressures aren’t going away anytime soon.

“There are huge pressures financially throughout the public sector, and that’s been known for a number of years,” said Barry. “I think what people have struggled with, is how to address those pressures and how to address the shortfall. They may have tried a number of ways that have got them to their current position, but it’s what the next step is. We need to work together with the market to address some of the challenges. One of the areas we need to address is to try and get the market to understand that there needs more parity in prices across services throughout the region,” he continued.

This lack of parity in the marketplace has been a particular burden for Haringey. In some instances, this has led to them paying much more than other London Authorities for the same service.

“Haringey Council pays significantly more for some of its Social Care services than other London Authorities. At the moment, we might pay up to 25% more than another London Council for the same services,” Barry told us.

Marketplaces made up of private providers in a more niche markets, such as care, are particularly hard to influence.

“I think there’s a fear factor that is played upon, especially when vulnerable people are involved. If the supply chain can leverage their position by playing on the fear, they will do. It’s all about supply and demand, especially in London where some resources are scarce and more in certain parts of London. This enables the market to increase prices knowing demand is high in these areas. If Authorities can work together bringing down ‘virtual fences’ around the boroughs, to share resources across London and have a more flexible political agenda, this will enable Authorities to deliver better value for money for residents,” said Barry.

Compared to Haringey Council’s previous processes, the introduction of adam’s Category Development System has been a clear step change when it comes to being more transparent around the supply chain.

“If you looked at how we operated before, we were heavily reliant on brokers picking up the phone to suppliers to establish whether they had capacity to deliver the services. That, in turn, depends on staff knowing the market. They’re knowledge is probably very good locally, but outside of the local perimeter, they may not be as familiar with the market and what services are available. A DPS, as part of adam’s category development system, creates a live framework environment whereby suppliers can join at anytime. The process makes commissioning services simpler for brokers. Instead of ringing around the whole supply chain until they find a supplier who can supply the services, they can publish the requirement to the whole market in one go. You’re also enabling the providers to come back to the broker with a price according to the requirement and demand, within a cap determined by the Council,” Barry continued.

At adam, when we start working with our clients, we actively engage smaller- and medium-sized businesses to join their marketplace, as well as helping the Councils to work more effectively with their current marketplace. We find that smaller providers are not only flexible in meeting requirements, but they also tend to provide more speciality services, helping to fill voids in service delivery.

This is a view that Haringey Council share, Barry told us: “We are trying to encourage more local SMEs to work with the authority. It’s good for local growth and employment, and the more we can commission locally, the less pressure it puts on public services. A DPS helps the SMEs, with its live environment, which enables providers to join at anytime, on condition they get through the accreditation process, to enable them to bid to provide the services.”

So how, then, does collaboration, based around a central Category Development System, help to level the marketplace? This is something that has been closely looked at by Haringey and that they are particular advocates of in the London marketplace.

“I believe there are two ways Councils can work together that helps us to solve the situation they face. One solution is to move us to a single market – either regional or wider – so that we can attain uniformity in prices across the various Authorities. We should all be sharing the same types of information around accreditation and evaluations; we all procure similar types of services, we all evaluate in similar ways, so why not bring that all together?” said Barry.

“I see adam’s Category Development System as an enabler for us to share the information I mentioned before. If we can get more Authorities to use the platform, sharing the same information about providers, it will start to condition the market towards parity in prices and service provision. It will also avoid costly procurements being undertaken individually by Authorities,” he continued.

And the next steps for Haringey Council?

“Procurement have to be careful they don’t fall into the trap that the Category Development System is a tool that providers are just going to use to place offers on care packages,” said Barry. “It’s so much more than that and we have to use it to get the best value out of it. In terms of Haringey, we will look at a second programme phase in January. For categories being considered outside of Social Care, I think there are some baseline criteria that need to be met, and if the system can meet the criteria, why can’t it be applied across multiple categories? If the market and the services are conducive to a DPS environment, why not roll it out to them as well?”

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