Approach 6: Strategic procurement of services against needs

June 2025 teaching template, slide 67

Approach 6 Strategic procurement of services against needs

Services that meet demand

June 2025 teaching template, slide 68

Approach 6: Strategic Procurement of Services Against Needs

Introduction: Focuses on structured procurement to meet defined needs efficiently and compliantly.

How to move toward: Strengthen procurement-process alignment, market intelligence, and performance monitoring.

What to do: Develop clear specifications based on engagement and evidence, and manage contracts robustly.

What not to do: Avoid focusing only on limitations—procurement should support broader strategic goals.

Risks and issues: Risk of becoming rigid or over-prescriptive; must avoid analysis paralysis.

Commissioning skills and structure: Requires technical procurement, contract management, and analytical capability with service insight.

June 2023 adult social care pre-reading, approach 6

Strategic Commissioning Approach 6. Strategic procurement of services against needs

Services that meet demand.

Introduction to this approach

This approach is paired with the ‘managing the policy and compliance landscape’ commissioning aspect, and is about providing services that meet demand. It begins with a view that the best way to deliver efficient public services is through excellent procurement practices. The council's role is to understand need, develop requirements, and to go out to tender for a carefully and strategically selected set of service.

Commissioning is focused upon carefully designed specifications and effective post-procurement contract management that is both tough and fair, holding providers to account for achieving that which they have said they will do for service users, learning lessons and negotiating appropriate changes within the scope of the contract and the procurement, as and when required.

This approach works best where there is an excellent team of procurement professionals, commissioners specialise in needs assessment and appropriate engagement with practitioners, providers, and people with lived experience, and political leadership is trusting of professionally-led commissioning. The approach is one of compliance and efficient delivery, and gaps in services are met through contract extensions, signposting services, and/or new contracts to ensure the care system is relatively coherent.

There is a focus on service user satisfaction, predicated on getting the research right before specification design, and the necessity of fitting citizen needs into pre-defined service categories is recognised as one of the implications of appropriate scale and standardisation. However, there is a premium on good contract management and properly-managed change and adaptation of service delivery in-contract.

The big opportunities for innovation and outcomes focus occur with big contract renewal, where aggregation or disaggregation and reinvention of the requirements are regularly considered, with good input from market knowledge, needs analysis (including unmet needs), feedback from people with lived experience, including those who draw on services, and benchmarking.

How to move towards this approach

This approach has historically been what many people have understood commissioning to be. It requires a sound process, which can be properly adapted for different types of requirements, and effective management of commissioner time and portfolios to ensure that all phases get due attention, and very close working relationships with procurement. Formal training on market management would be a strong first step, as would studying key contracts from elsewhere.

What to do, and what not to do, when you are pursuing this approach

Commissioners should make sure that they are actively creating the world in which they work, rather than being a victim of all the constraints they are under. Part of this will be to ensure an understanding of the goals of the place and the limits being work within, as part of a collaborative effort with service users, leaders, wider colleagues, partners, and suppliers.

Be aware of the risk of focusing on what is not possible and limiting yourself to ‘only’ doing what is mandated. The ultimate goal here is a clear sense of purpose within known limitations, and to effectively present that to suppliers, to ensure clarity.

Specific risks and issues

Commissioners should set the right, well-informed risk appetite, and need to avoid being completely risk averse. It will be important to ensure that the understanding of ‘needs’ and ‘services’ is not prescriptively narrow but takes into account co-design with citizens, to ensure impacts both up- and down-stream of services.

There should always be enough capacity for big contract renewal. Whilst building opportunities to co-design and test and learn into the system, caution will be required to avoid being sucked into ‘analysis paralysis’, and always trying to get the perfect specification.

Considerations for commissioning skills and structure

Commissioners need strong technical skills and abilities in engagement with service users and others, and will ensure active contract management and ongoing learning. Commissioning is likely to be quite closely coupled to service providers, and therefore adult social care focused. Good data on results and satisfaction will be required for analysis. Commissioners also need to be subject matter and policy experts, or work very closely with those who are, and have strong market-shaping and market engagement skills.

Commissioners in this model need to be good research and engagement managers, and excellent at project management and time management. It is important that they support each other as a team to avoid overload and the risk of becoming blinkered and focused only on their allocated focus areas.

Examples of this approach in practice

• Two councils in very different parts of the country developed a de facto social license putting constraints around the market for home care – requiring a Living Wage, services to be based in the borough, and creating small lots. This created a structure which met their compliance requirements and achieved their social and outcome goals.
• A county worked to implement a county-wide commissioning strategy and policy, driven by integrated needs analysis and clear policy-setting from the integrated health and care board, the children’s joint strategic needs analysis, the police and crime strategy and the local economic partnership. Working closely with district councils and other partners, their adult social care commissioning was therefore a clear part of overall county goals, enabled by strategy, and with clear connections to families, employment, crime, etc.
• A borough entered into shared commissioning arrangements across contractual partners to support implementation of a place-based plan. This meant lifting significant amounts of adult social care funding out of their own organisation structure, and spreading it across the new joint organisation, where much was operationally managed by partner organisations. This allowed a focus on the place-based plan and more flexible procurement while still meeting compliance requirements.

One thing to read

NSW Government Commissioning and Contestability Practice Guide. NSW Government. 2016 https://arp.nsw.gov.au/tpp16-05-nsw-government-commissioning-and-contestability-policy/