8. Stage 2: Analyse
Councils currently use a range of analytical methods to prepare for procurement exercises from small project development to major service change:
- Market analysis, including gap analysis and evaluation of strengths/weaknesses;
- Quality/care standards evaluation and analysis of outcome measures;
- Analysis of personalisation, service user choice & control;
- Cost benefit analysis;
- Procurement risk assessment and equality impact analysis;
- Contract type evaluation;
- Evaluation of service user and carer views;
- Evaluation of service provider views;
- Evaluation of inspection reports by the regulatory bodies;
- Option appraisal.
This section addresses the second stage of the procurement process, which provides an opportunity to analyse various issues which are relevant to a particular procurement exercise. The analysis stage of the process includes using information from the commissioning strategy and/or service plans which clearly defines need (including outcomes, waiting times, unmet need and future demand) and required outcomes for individuals. This part of the guidance considers:
1) Establishing Needs and Outcomes
2) Current supply - range and quality, gaps and duplication, resource availability;
3) Current performance evaluation - relevant data and benchmarking information;
4) Market analysis - number/mix of providers including internal service provision.
A useful framework for market mapping and analysis has been developed by the Institute for Public Care ( Appendix 8).
8.2 Establishing needs and outcomes
The purpose of this part of the analysis phase is not to repeat work which has been carried out within wider commissioning activity or service development planning, but to draw out the detail of specific needs from commissioning strategies and/or service plans which the procurement process is required to meet.
Commissioning strategies and service plans should provide a clear direction for procurement activity, but may not include the level of detail required for analysis of the procurement task and about the service to be put in place. The analysis stage is therefore useful in determining what is expected of the service to be secured or maintained through the procurement process. This analysis should clarify expectations against the social care procurement principles, and identify what is expected from procurement and service delivery in relation to the particular service which will be subject of the procurement activity.
Consideration should be given to the areas detailed below;
- Needs - what is already known from an aggregation of person centred plans about the needs to be met and the outcomes delivered by the service;
- Outcomes - what positive outcomes are planned for service users and carers;
- Personalisation - what choice and control will the service provide, and what issues are there concerning consistency, continuity, and performance improvement;
- Involvement - how will service users and carers be active partners and citizen leaders in defining their needs and outcomes and influencing the design of the service;
- Care Standards - how will the service deliver National Care Standards;
- Codes of Practice - what will be needed to provide for the interests and independence of users and carers, their rights and safety, trust and confidence;
- Codes of Practice - will any specialist skills and knowledge be required of procurement staff for this particular procurement exercise;
- Best Value - what funding is available for the service to be procured, and what issues may there are be in relation to balancing quality and cost with regard to economy, efficiency, effectiveness, equal opportunities, attention to risk, and sustainable development;
- Benefit and Risk - what benefit and risk analysis is needed to assess the potential impact of the procurement exercise on service users, carers, quality, cost and partnership working;
- Procurement Rules - what are the implications of procurement legislation and local procurement policy for the particular procurement exercise;
- Workforce - what skills and competencies are required to deliver the service;
- Leadership - what senior management involvement is needed for the exercise;
- Contract size - what should the contract encompass, taking into account the needs and outcomes required for service users.
8.3 Current supply arrangements and performance evaluation
In analysing the current supply arrangements the Council should seek to assess the extent to which these arrangements can deliver the service required, as defined by the commissioning strategy or service plan and through the needs analysis described above.
The consideration of current supply should take account of the existing range of providers which deliver services locally and more widely to particular care groups. It should take account of issues of quality in supply and the availability of providers to deliver good outcomes, personalisation and involvement. It should also consider organisational capacity and capability to develop new or different services.
Councils should continue to develop comprehensive information on current supply, which they may or may not be currently funding. They should also look to draw relevant information from other sources, including the regulatory bodies. For example, Councils should access relevant information held by the Care Commission, including information on registration, inspection, complaints and enforcement.
It is important to have clear and comprehensive information on the design of current supply arrangements both to evaluate current performance but also to assess the suitability of those supply arrangements against best value considerations. As the procurement exercise moves into its later stages involving service specification and evaluation, it will be important to have carried out preparatory comparative and benchmarking analysis so that issues relevant to the particular procurement exercise, including quality and cost, are understood. The assessment of current supply arrangements should therefore reflect on a number of best value factors:
- cost and economy;
- equal opportunities;
- attention to risk; and
- sustainable development.
Evaluation of cost will require detailed definition of unit costs and the development of benchmarking within and between local areas. It will also require analysis of the potential for savings and consideration of 'cashable efficiencies - producing the same or improved results with fewer resources', 42 for example savings, such as price savings, that generate cash that can be used by organisations to resource additional delivery.
It is important to regularly review assessments of current supply arrangements for each specified service area as the policy and organisational context of these arrangements may have been subject to significant change since first designed. This assessment process must provide a range of stakeholders with the opportunity to engage with and understand the range of perspectives on what is affecting current supply, including the position of directly provided local authority services. This stakeholder involvement will increase the chance of designing future supply arrangements that best meets the various requirements specified. The desire for service improvement and better outcomes within future resource constraints, means that continuing to operate the same supply arrangements may not be sustainable.
When decisions have been taken in relation to supply arrangements it will be important to ensure that this is communicated clearly and timeously to stakeholders.
To do this effectively requires the analysis of good quality, reliable data. Ideally this data should already be routinely collected by the Council or available from other sources such as the Care Commission data store, but, if not, arrangements should be put in place to collect relevant data which allows informed judgements to be made on current performance. This also serves to highlight the need to ensure that data collection and analysis arrangements are designed, resourced and put in place to inform the whole procurement process and provide some quality assurance in service delivery.
This activity allows the local authority to form a view on performance, which can be used to inform detailed work at the "Plan" phase of the procurement process. As with other preparation it is important to ensure stakeholders are aware of and engaged in the process.
8.4 Market analysis
After analysing individual needs which determine the detailed service required to produce intended outcomes, assessing the current supply arrangements to meet these needs, and provider performance in supply, the final element of analysis is to carry out market analysis against the additional demand of the particular procurement exercise which is underway.
Market analysis within particular procurement exercises should take account of the Council's policy and approach to the delivery of directly provided local authority services in the service area under consideration. The analysis will need to identify how the availability of directly provided Council services complies with best value and may affect the arrangements for access, cost, relationship management and service development within the procurement process and subsequent service delivery by a private or a voluntary sector provider.
Market analysis may also need to consider how to stimulate the market to promote interest in responding to the procurement exercise, for example interest from providers with specialist expertise. Market analysis should also consider what the implications may be for future market and service security if there is a reduction in the number of providers on a framework agreement. It should consider how to ensure choice for service users.
A comprehensive market analysis of these issues to properly inform the procurement process will be gained by engaging with stakeholders, thus providing an opportunity to influence decisions taken. In particular engagement with the supply market will assist in understanding potential suppliers, potential new developments, perceived barriers to involvement in the procurement process and whether suppliers may wish to form consortia.
8.5 Option Appraisal
Equality Impact Assessment
When developing proposals and making policy decisions, including policy decisions taken in the context of their commissioning and procurement activities, public bodies must comply with their statutory equality duties and ensure that such decisions do not have a disproportionately negative effect on people from different ethnic groups, disabled people, and men and women. Local authorities' consideration of the options for service delivery should, therefore, include an equality impact assessment. Further information on the conduct of equality impact assessments is available on the Equality and Human Rights Commission website. 43
Linking commissioning strategies, service plans and procurement analysis
Procurement activity should build on planning work, which has considered the range of alternative approaches to achieving the desired outcomes of the procurement process for the care group and service to be developed.
Earlier commissioning or service planning work should have reached conclusions based on option appraisal of: the delivery of outcomes by different models of care and support; quality issues within different models; the costs of different models against the availability of current and future funding; and the workforce requirements for the range of models of care and support.
The analysis required within a procurement exercise needs to build on the direction set by this earlier commissioning work, and complete any gaps left in the earlier planning stages. However, the main function of option appraisal within this analysis stage of the procurement process is to build on the findings about current supply arrangements and performance to determine the best procurement route to follow.
In summary, the overall analysis carried out should provide the link between commissioning strategies, financial and workforce plans, and service development and improvement. The analysis stage should provide the foundation of the procurement process and should fully inform the procurement of particular services as set out in the Procurement Plan to be developed in the next stage of the procurement process.