Does Cameron understand procurement strategy?

A few months ago I drew attention to the imbalance of power between the Ministry of Justice and the legal profession, specifically the threat relating to changes in the Legal Aid system. The changes to Legal Aid mean a 30% reduction in Legal Aid cut in fees paid to barristers.

Yesterday we saw the ironic court scene of Alexander Cameron QC, the Prime Minister's brother, arguing that the trial of a £4.5m fraud case should be delayed as a result of the inability of the defendants to access lawyers prepared to defend them under the new Legal Aid rules. Barristers have effectively said, "if that's what the rate is, no thanks".

The drama is even more bizarre in that Alex Cameron had decided to argue that the case could not continue, without charging for his fee!

From a procurement perspective this reminds us of three strategies:

1. Poistioning relative power of the buyer/supplier relationship. The barristers have the power to sell their services outside the Legal Aid system, so they can walk away without great pain;
2. A focus on price reduction can compromise delivery. The suppliers in this case have said to MoJ the price you are prepared to pay is not attractive enough for us to deliver; and
3. Achieving 'preferred customer' disorts the market in favour of the buyer. In this example, Alex Cameron delivered his services free of charge.

While the MoJ case is of interest and relevant to procurement, there is a real danger we are approaching replication elsewhere in the system. For example, think of the threat of the Care Quality Commission to penalise those who on deliver 15 minute home visits to those with dementia. The buyers should of course specify for longer visits based on outcomes to be delivered as opposed to inputs, and in turn pay a rate which is affordable for the providers. But what would happen if the threat continues and the care providers say "if that's what the rate is, no thanks"? Well, I suspect the health and social services commissioners would be in crisis, the Department of Health have no means to deliver the care, there are no longer sufficient places for public sector residential care in either hospitals or homes. Visualise the political impact if these services started to collapse the week before the election?

A sad reflection on social care procurement

Last night's Newsnight didn't do any favours for public procurement and particularly those responsible for social services.

In summary, the report highlighted that some organisations, contracted to provide home care, only pay staff for the specific time the careworkers are in the users home (no travelling time getting between users locations is paid for) and, as a result, the carers, considering all their actual working time, are paid below the minimum wage.

For quite some time it has been recognised that it makes good sense to keep those who need care in their own homes as long as is safe - it improves their quality of life and reduces the national costs of placing users in care homes. That being the case, the aim should be to ensure good quality home care provision which also means paying for appropriate quality staff.

We have discussed some of the implications of when care provision goes wrong in the past.

Bad as that is, the real disappointment was in the interview with the social services (ADSS) spokesperson. Her analysis was that bidders could choose what price to bid at and the conditions of employment. If that was actually her justification it is seriously flawed. Those procuring social care need to recognise the risks of contracting at rates which are unsustainable and cannot deliver the level of service required. There needs to be much more due diligence.

All together the Newsnight report was not good for those who procure social care, but worse it was not good for those who are dependent on that care if 'lowest price' regardless is the strategy now being pursued.

Staggering from Burgergate to Zimmergate

Retailers buy on consumers behalf beef which is to be of a suitable quality. The retailers have a supply chain and rely on third parties to provide the beef. The quality is set out in a specification, and behind that there is an assumption of risk management and contract management. The beef turns out to be wrongly labelled and we have a national scandal. The 'Godfathers' of the mafia are cited as potentially at fault, then we discover it, as much as it may be attractive to export blame, the finger starts to point locally.  Most of us are aghast and the fear is our health may suffer. We give it a name 'Burgergate'.

But substitute some of the words: Social services buy on the needy's behalf personal care which is to be of a suitable quality. Social services have a supply chain and rely on third parties to provide the care. The quality is set out in a specification, and behind that there is an assumption of risk management and contract management. The personal care turns out to be wrongly labelled and we have a national scandal. Potentially your father and mother are the victims, the finger starts to point locally.  Most of us should be aghast and the fear is our health may suffer. That's what I'd call 'Zimmergate'.

What's worse Zimmergate, for want of a better description exists as the Care Quality Commission has now found. 26% failure to meet the quality standard, reluctance to complain, failure to listen to the families who tried to raise concerns. Of course this isn't the first time we have considered the dependency of the elderly on good procurement. Is it right we could it be more concerned about the content of 'cheap burgers' and call that a scandal in need of urgent attention?

Let's leave the last word to The National Pensioners Convention General Secretary, who seems to have some useful suggestions for public procurement:

"Local authorities have a responsibility to start commissioning services on the grounds of quality - rather than for the lowest price. Contracts should only be awarded to those who can guarantee that staff are properly trained and qualified to do the job - and the idea that services can be provided in blocks of 15 minutes at a time has got to stop."