Contact: Margot Mottershead Ext: 7281 Email: [email protected]

Angela Hill Ext: 7131 Email: [email protected]

Approved by:..................................... Date:...........................

Councillor Patricia Banks

Executive Member for Adult Social Care

Contact: Margot Mottershead Ext: 7281 Email: [email protected]

Angela Hill Ext: 7131 Email: [email protected]

4 Summary

4.1 As of 1 April 2007, there are forty-six block contracts for specialist mental health services in place. Overall value is currently £3,450,592 per annum. Many of these contracts are jointly funded and the breakdown of total annual funding is as follows: Hampshire County Council - Mental Health Services - £2,148,212; Hampshire County Council - Supporting People - £152,536; Hampshire Primary Care Trust - £1,139,074; Crime and Disorder Reduction Partnerships - £10,770.

4.2 A strategy for the management of contracts for mental health services has been agreed. The budget for block contracts was transferred from locality budgets to the budget managed by the Strategic Commissioning Director for Mental Health from 1 April 2007. This should resolve the potential conflict of interest for managers working within partnership trusts, as these work towards foundation trust status.

4.3 Because of recent changes in legislation, most contracts will now have to be competitively tendered. In order to manage this increased workload and to achieve improved procurement practice and back-office functions, it is proposed that a tendering strategy is implemented. This will enable contracts to be grouped together according to service type and tendered as a group. This should deliver improved procurement, improved back office functions, improved transactional services and increased productive time.

4.4 This approach will enable services to be reviewed on a county-wide basis at least six months prior to tender, to determine appropriateness of service and level of need. It will provide an opportunity to reconfigure services to modernise services to meet current need and to provide equitable services across the county.The groups of contracts will be tendered over a four year period from 2007 to 2011. Extensions are requested for nine of the current contracts in order to implement the proposed tender and review programme for 2007-2009. The contracts are for the following services: six advocacy projects in North Hampshire, Fareham & Gosport, Mid Hampshire, Eastleigh & Romsey, East Hampshire and North Hampshire, one information technology project in Eastleigh, one gardening project in North Hampshire and one county-wide training and Consultancy services project. The value of these extensions will not exceed £220,000. Where joint funding is in place, written confirmation from partner commissioning agencies to extend the contracts will be sought. A further report will be submitted to request extensions to other contracts which will be tendered after April 2009.

4.5 The tender programme will be made available to all potential service providers through a public web page on "Hantsweb". This should provide transparency to the tendering process and enable providers to plan ahead for the preparation of their tender submissions.

5 Options Considered:

5.1 Option 1 - Continue current model:

5.1.1 This would require an average of twelve tender processes a year;

5.1.2 It is unlikely that this would be feasible within existing resources as it would require a substantially increased input from contracts officers, commissioning managers, operational managers, finance team and legal team, thereby reducing their time available for other contracting processes and service improvement.

5.2 Option 2 - Proposed Tender Plan

5.2.1 This should make effective use of existing staffing resources and offer opportunities for improved procurement practice and back-office functions.

6 Recommendation(s)

6.1 That authority is given to implement the proposed tendering strategy for mental health services.

6.2 That authority is given to extend nine contracts for mental health services in accordance with the proposed tender schedule for 2007 to 2009 set out in bold in Appendix 1 (confidential appendix).

6.3 That a further report is submitted to seek authority to extend contracts in accordance with the proposed tender schedule for 2009 to 2011.

7 Links to Corporate Strategy

7.1 This report supports the corporate strategy priorities of "Hampshire safer and more secure for all" by protecting vulnerable people, "Maximising wellbeing" by ensuring access to the services people need and support should things go wrong and "Enhancing quality of life" by planning proactively for the future.

8 Links to Directorate Outcomes

8.1 This report links to Directorate Outcomes by ensuring value for money through effective use of resources in tendering, offering opportunities for efficiency savings, ensuring quality of services by providing a structure to plan service reviews and offering transparency in the tendering process to providers. This should deliver high quality, cost effective services to the vulnerable people of Hampshire

8.2 This report supports the Directorate Outcomes by providing a transparent and planned tendering process. This should ensure that all potential service providers are informed of the process in advance and therefore able to plan to tender for appropriate services. This is likely to deliver an increase in the range and number of providers tendering for services, which should result in an improvement of quality in services overall, thereby ensuring that the right care is delivered in the right place at the right time for service users and that vulnerable people are protected.

9 Impact Assessment

9.1 In compiling this report account has been taken of the requirements of the Corporate Equalities Plan and Race Scheme.

10 Consultation

10.1 A forward tender plan should allow all providers to have advance knowledge of all tenders scheduled in each financial year.

10.2 Consultation regarding individual services is an integral part of the service review process. This begins at least six months before the start of the tendering process and should involve a three month consultation with service users and other stakeholders.

11 Improved Procurement Practice

11.1 Improved procurement practice to gain the benefits of scale (i.e. economy in obtaining resources) will be achieved through the following changes to procedures:

11.1.1 As part of the tender process, providers will be advised of a maximum value for each service being tendered. These maximum values should be set to deliver savings to meet targets set through financial recovery planning;

11.1.2 Providers will be encouraged to bid competitively for more than one contract in a tender exercise and to offer a reduction in overall value to reflect efficiency savings in their management costs.

12 Improvement in back-office functions

12.1 An increase in productive time will be achieved through standardising and simplifying the review and tendering processes. Currently, there are no standard procedures in place and processes vary considerably between localities and services. It is planned to develop proformas and procedures to support the review and tender processes. This should lead to a reduction in staff time currently being used to devise and implement individual service tenders and reviews.

12.2 There are forty-six contracts in place for mental health services. Until recently, most of these contracts were renewed through single tender. The majority of these will now have to be competitively tendered because of recent changes in legislation.

12.3 The tendering process requires staffing resources for the preparation and tendering of contracts from the following teams: contracts and commissioning, mental health partnership trust, finance and legal. Staff are needed to prepare advertisements, tender packs and evaluation tools, to hold workshops and interview panels, to assess applications, to prepare the legal documents and to support providers through service transfer processes. Current resources are insufficient to support the individual tendering of forty-six services over a four year period. By grouping these contracts together for the purpose of tendering, the number of tenders can be reduced to twelve complex tender processes over a four year period and any individual tenders that arise due to service development. This should enable the tendering process to be managed within existing resources.

12.4 Further efficiencies in the use of staffing resources in the legal team and the contracts team should be achieved where several small contracts are awarded to a single provider and can be grouped together into a single contract. With fewer contracts in place, there should also be a reduction in the use of staffing resources needed to monitor contracts. This will be quantified and agreed following the implementation of new contract monitoring processes by April 2008;

12.5 Advertising costs should be reduced by placing a single advertisement for a group of contracts. The average cost for advertising a tender is approximately £1,500. The proposed schedule should reduce estimated costs from £69,000 to £21,000.

12.6 An improvement in transactional services should be achieved through an increased use of the Council's tenders website to simplify information and access for providers. It is proposed that the full tender programme is listed on the website. This should enable providers to plan ahead for tender exercises.

12.7 Once in place, the impact of these changes will be quantified as part of the contracts strategy implementation plan.

13 Partnership Working

13.1 The development and monitoring of mental health services in Hampshire is currently co-ordinated through multi-agency mental health locality implementation teams (LITs) in accordance with national, regional and local guidance. Reviews of contracted services should be managed through the LITs.

13.2 A joint mental health commissioning team for Hampshire County Council and Hampshire Primary Care Trust is in place. A significant proportion of contracts for mental health services are commissioned jointly with Hampshire Primary Care Trust.

13.3 Further work is underway to develop commissioning arrangements with the Hampshire Supporting People Team and to ensure that contracts are aligned as far as possible.

13.4 Some recent work between Hampshire County Council Adult Services and Crime and Disorder Reduction Partnerships in Fareham, Gosport and Havant has culminated in a jointly commissioned contract in South East Hampshire. It is hoped that this work is continued in other parts of Hampshire.

14 Finances

14.1 In order to align contract expiry dates for the proposed contracts tender schedule, contract extensions will be required for twenty-eight contracts. Authority to extend the contracts will be sought in two stages. This report seeks authority to extend contracts to be tendered between April 2007 and March 2009. This exercise should be cost neutral.

14.2 Details of the proposed review schedule are set out in Appendix 1 (Confidential). This shows the length of extensions required and values of individual contracts. (Please note - some contracts in the schedule will be tendered twice during the four years in order to bring them into line with similar services).

Section 100 D - Local Government Act 1972 - background documents

The following documents discuss facts or matters on which this report, or an important part of it, is based and have been relied upon to a material extent in the preparation of this report.

NB: The list excludes:

1. Published works

2. Documents which disclose exempt or confidential information as defined in the Act.

None