Pid- Sub(v3)

Alec Fraher and Associates Ltd June 2008

Sub-Regional Specialist Category Sourcing Programme Sustainable Futures, Positive Futures

Sub-Regional Collaborative Specialist Category Sourcing Programme (Substance Misuse) Project Initiation Document

Draft Version 1.0

June 2008

Author/Owner

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Alec Fraher Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

Director, Alec Fraher and Associates Ltd

Contents Part One Summary

Part Two Farming the Opportunity

Part Three Outcomes of the Sunderland Approach

Part Four The Programme

Part Five Programme Management

Part Six Approval and Permission

Part Seven About Alec Fraher and Associates Ltd 32

Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

Part One: Summary The South of Tyne NHS PCT and the three local authorities of Sunderland, South of Tyne and Gateshead, spend in excess of xxxx annually in bought in services to tackle substance misuse. The current contracting landscape is fragmented and uncoordinated. It has evolved in unplanned manner overtime without broad strategic vision. Whilst procurement collaboration in across the North East has a good track record, North East Local Authorities and PCT’s, could do much better, ensuring the delivery of strategic outcomes whilst mitigating risks; through the harnessing of spend and optimisation of activity into a collaborative strategic approach aligned with the sub-regional commissioning lead of the South of Tyne NHS PCT, the local understanding of Local Strategic partnerships and Third and Fourth Sector Providers and community interest groups. This programme aspires to the development of a sustainable Sub-Regional collaborative specialist category sourcing programme for substance misuse to: •

Deliver a better deal for Strategic Partnerships and the South of Tyne NHS PCT by understanding, managing and leveraging the xxxxx identified annual spend on bought in substance misuse services currently bought separately but provided sub-regionally

• Deliver co-ordinated, intelligent and efficient local and sub-regional approaches to market management, releasing xxx, over 3 years to support front line delivery in tacking substance misuse problems • Drive forward the adoption of Excellence Models by the provider market in order to realise the back office process efficiencies and satisfy the requirements of World Class Commissioning Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

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• Deliver consistently high calibre, value for money and world class contracts for everyone • Optimise procurement activities into a collaborative, performance management framework, removing duplication and reducing resource requirements by as much as two-thirds for non-lead commissioners • Offer a strategic approach, driving forward world class commissioning transforming local delivery and delivering the Public Sector Transformation agenda’s. • Embed collaborative procurement into world class commissioning, sharing expertise and knowledge with a public service and performance management ethos • Shape procurement sourcing requirements into a strategic forward plan to maximise opportunity to stimulate the sub-regional delivery of broad policies; drive innovation and market shaping, supporting local regeneration, addressing inequality and promoting social protection. • Optimise cashable savings and mitigate the risks of sustaining the savings ensuring Third and Fourth Sector providers with a commitment to world class commissioning and predicated outcomes that are truly designed for demand and meet patient and customer need. In the medium term, having harnessed the category sourcing into a cyclical programme, the opportunity will present itself to review the organisation of procurement and commissioning skills and capacity across the sub-region and transform this activity into a fit for purpose structure for World Class Commissioning of future delivery in substance misuse services. Summary of Recommendations

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Recommendation One Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

Adopt the framework process approach for category sourcing for the Strategic Category, using Article 81(3) exemptions to ensure that cashable savings are realised. Recommendation Two Develop a Sub-Regional (Strategic Category) standing list owned by the South of Tyne NHS PCT Recommendation Three Take advantage of the Strategic Category programme, building on the Sunderland approach, to agree the form and content of a sub-regional concordat. Adopting in whole or in part the Sunderland approach to total quality management Recommendation Four The evaluation and assessment criteria of Strategic Category providers are as follows: • Excellence in drawing down funding, for the benefit of themselves and others • Excellence in employee and staff management • Excellence in customer/patient care, treatment and management The master score system ( balance scorecard) from the Sunderland APPS is available can be utilised or adapted for use. Recommendation Five The sub-regional meetings of the Head of Service and JCM’s as the Expert Group, with representatives from the three local area Joint Commissioning Groups nominating one local government representative, a clinical specialist and invite providers to nominate a provider side representative to act as the Quality Assurance Group

Part Two: Framing the Opportunity Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

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In 2006-2007, the Safe Sunderland Partnership established the building blocks necessary to procure substance misuse services to deliver efficiencies and ensure an increase in wellbeing across the city. This approach was known as Better, Brighter Futures and has provided a rich source of intelligence to support the business case for a sub-regional collaborative specialist category sourcing programme. The primary focus was supporting the Safer Sunderland Partnership to develop commissioning baselines, identifying who was providing what, was it effective and at what cost, economically and socially. The visibility of the evidence and intelligence gathered has enabled this Partnership to make progressive steps, showing how a whole system approach delivers efficiencies, establishing contract registers and comprehensive contract programmes that deliver, meet and exceed delivery targets. The Partnership has reported that the approach has enabled: • Setting realistic efficiency targets • Ability to capture savings • Development of workflow to realise saving potential and increase wellbeing • Development of comprehensive contracts framework • Business platform for additional resources on an invest to save basis • Understand the capabilities and capacity of local provider markets and the impact on communities • Provide the opportunity for improved budget management • Provide the basis for a considered approach to procurement Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

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• Opportunity for improved provider management and overall statistical controls to ensure fair play and capture innovation • Offers the basis for meaningful collaborative procurement possibilities • Mitigates the risk of hyper growth and competition whilst stimulating innovation • Provides a modern procurement model that is suited to World Class Commissioning and can be re-freshed in future years.

Part Three: Outcomes of the Sunderland Approach The objective of the Sunderland approach was to establish the grounds for market segmentation, and having undertaken a major assessment of competency establish a provider enablement programme. The following diagrams provide a strategic overview of the categorisation and analysis of the Safer Sunderland Partnership Category Sourcing Programme, Better, Brighter Futures - this process is known as APPS.

Diagram .1 An Overview of the Framework Assessment, Evaluation and Provider Enablement Process Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

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Source: Using P4 methods to Establish strategic Control of commissioning Process, Alec Fraher 2008/National Procurement Strategy/Duncan Olive NECE 2007.

The Categories Explained Bottleneck category providers handle significant social problems and risks for the system as a whole, require contracting flexibility, financial assurance and back room support, relatively high levels of provider control and back up plans. The role played by this category of provider is often central to developing a detailed understanding of customer (patient need is covered later) needs, identifying unique ways of creating value and tackling inequality head on. This category can drive up competitive urgency, and the providers are likely to be vocal about their perceived competitors capabilities and competencies, cynical about performance management as a feel good exercise in meeting core competencies rather than addressing people’s needs. Love them or loathe them is category of provider is pivotal to driving forward change,

Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

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fosters local accountability and acts as a natural check and balance to other parts of the system. Routine category provides are those typically best suited to open or restricted procurement procedures where efficient patient/customer processing logistics and service specifications have already been standardised and outcomes are measured by volume of patients seen and other targets like retention rates, completions, DNA’s. This category of provider welcomes the use of open competition, is usually technically competent with good business acumen and seeks to increase its market position by offering leverage to the purchaser and employment opportunities to local residents. This category is vulnerable to hyper growth and hyper competition which can have adverse effects on both the bottleneck and leverage categories, undermining both the contractual footing and overall performance management of a Partnership. Leverage category providers allow commissioners to fully exploit its purchasing power and are best suited to mixed procurement procedures where target pricing and service substitution are required to make efficiencies and improve quality. Care must be taken not to react to the pressures, as great as they may be, and not to confuse the use of open or restricted procedures, best suited to the Routine Category, as a reaction to hyper-growth or hyper- competition that is driven by both the Bottleneck and Routine Categories. The leverage category is concerned solely with the overall health of the provider market and serves as conduit to the strategic category. Strategic category providers are those that can show that they are the embodiment of excellence or have the potential to be so. The providers’ are characterised by an ability to understand population need, demographics and the challenges of working in a global economy; working in an integrated and fair way with providers from other categories knowing when and how to invest and divest its own patient interests; with a Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

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requirement for high end clinical and managerial governance and service excellence. This category of provider is best suited to specialist procurement procures, like competitive dialogue and negotiated procedures or a call off. This category of provider may also act as a hosted service and let second stage awards on behalf of the strategic commissioners. Summary Observations based on the Sunderland Approach The historical focus on provider contract management and the micro performance management of individual providers was lacking strategic focus, drawing the back room strategic resources of the commissioning team into the day to day activities of providers and attention away from whole system management resulting in reactive short sighted market development. In this scenario hyper competition is likely to increase – the Bottleneck category providers compete with routine category providers; Routine category lobby for strategic category position and public sector services are used as leverage – the historical reliance on open or restricted procurement becoming the accepted commissioning response with little or no scope to pay attention to the overall impact on communities. Diagram 2 below shows the self reported priorities of all providers completing the EFQM1iself assessment. The diagram shows that for all providers, based on their own ‘self assessed form’ performance was a reaction to the function of market conditions and not community needs.

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EFQM is the European Foundation for Quality Management and is the industry standard for assessing procurement excellence, it was adapted for use in the Sunderland programme, the evidenced submitted being tested against an algorithm and balance score card;.2 Kion is the Greek word for ‘meaning’ and the system shown was validated by Cipfa/City in Guilds academic/professional Exam Board in March 2008.

Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

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Diagram 2

Strategic Commission ing Gap

Source: Using P4 Methods to Establish Strategic Control of Commissioning, Process Alec Fraher,2008

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Alec Fraher and Associates Ltd

June 2008 | 101 Heslington Lane, York YO01 4HP tel 07811 590071

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The strategic commissioning gap identified required that a new approach be used; this approach is now known as Kion and is a validated performance management framework for whole system transformation. Diagram 3 below shows the framework to the Kion System, it is unlikely to make sense to the lay professional, but makes use of and adapts otherwise disparate performance management tools and techniques which formed the backdrop to the Sunderland approach. Diagram 3. The Kion System - A Framework Process for Total Quality Management

Source: Using P4 methods to Establish Strategic Control of Commissioning Processes, Alec Fraher 2008

The Kion System simply sets out to provide a framework for the integration of the National Procurement Strategy and World Class Commissioning, and one year on from the start of these processes there is sufficient operational evidence to support Sunderland’s efforts to transform its services in line with national expectations. The recent successes of the Sunderland Approach are commented on in the National Treatment Agency Annual Report 2007.

Comment and Opinion about the feasibility and transferability of the Sunderland approach at a sub regional level In theory, the Sunderland Approach could be replicated on a Partnership by Partnership basis, or adopted at a regional and subregional level. We could go as far to say that the North East has already paved the way for collaborative category sourcing programmes and has an established track record regionally and sub-regionally, with initiatives like the Tees Valley Partnership, the Tyne and Wear Efficiency Group and the Northumberland Procurement Forum already in existence. The Local authority mandate for a comprehensive collaborative category sourcing programme was taken at the First Summit for Chief Officers and Senior Procurement Officers ( 19th March 2007), the extension of this mandate to health and social care is less clear although permission has been given at CEO level within local authorities. The new sub-regional position of the South of Tyne NHS PCT necessitates the sifting and sorting of standing orders and contract registers, will allow for the identification of duplicated back room effort, streamlined administration, and a coordinated response, as lead commissioner, to section 31 obligations with local authorities. It is important to note that the Sunderland approach was both brave and bold. Acting from the back foot and in response to the National Treatment Agency and the Health Care Commission, Sunderland had to make rapid improvements. It was this sense of urgency that prompted the mandate to go ahead with the scheme. With hindsight and reflection the Sunderland approach has allowed for the identification of the key attributes that supported this initiative. These attributes are listed below, in no particular order of importance, with commentary about whether or not the Sunderland approach is transferable at a sub regional level. The attributes are in effect pre-requisites for sub-regional commissioning, they are listed below: Timing Q: What if the contract end dates differ for each local area? Will this have an impact on prioritisation of category sourcing and the timeframe for optimal benefits?

A: The approach advocates market segmentation and contracted services provided in the Bottleneck and Routine categories are best suited to local arrangements, the Sunderland approach has captured all the main regional and national providers and mitigates their inclusion on a sub regional standing list concerned solely with increased purchaser leverage and strategic commissioning. In this way existing contractual commitments are assessed according to the market category, and will not interfere with any existing obligations. Differing Priorities Q: Will variation in spend and the differing objectives of the local areas mean that priorities are very different. A: The demographics for the three local authorities show significant commonalities mitigating the development of sub-regional commissioning in the strategic category, offering increased focus, setting new standards of excellence, harmonising operational variation and addressing key service omissions, like services to asylum seekers and refugees, travellers or other underserved groups, like gays and lesbians, women and sex workers. Strategic prioritisation within this category levels up service provision as a whole and adds value to the system as a whole. The Joint Strategic Needs Assessment for Gateshead show enormous potential for strategic sub-regional commissioning in the areas of mental health, circulatory disease, and alcohol and supported housing. That substance misuse is shown to be a causal factor in poor health, poor health attainment in all these service areas and disproportionately effects those living in more disadvantaged communities are reason enough to give a mandate for this approach. One size fits All Approach Q: How will the Sunderland approach meet with the other two local authority and their Partners’ legal and democratic obligations? A: The Sunderland approach has adopted the key recommendations of the National Procurement Strategy, is in keeping with meeting Gershon efficiencies and endorses the flexibilities of section 31 and LAA agreements. The categorisation of the market segments is aligned to the level of procurement expertise and specialised commissioning needed

according to the service needed against population and demographic demand. This will allow Partner agencies greater commissioning control in each category. An earlier version of the approach was piloted and road tested at North Tyneside Council during 2004-05 for all adult customer groups, being held up as a model of best practice by CSIP and NIMHEW, in developing provider markets in mental health. The road test included senior level procurement backing and was approved by the authorities s151 Officer. Although the Sunderland approach is the main focus of this feasibility appraisal, the road testing at North Tyneside Council showed that the use of open and restricted procurement procedures was premised upon early externalisation and service modernisation programmes and designed to meet the demands of service substitution where customer need was assessed as being low to moderate. The learning showed that both open and restricted procedures are suited to Routine Category services, where specifications and contracting arrangements standardised the administrative burden and contracting for a service is relatively straight forward. The practice wisdom gained now shows that the blanket application of these procedures to other categories has diluted expertise, stifled innovation and been applied to more specialised areas inappropriately, undermining confidence in the provision offered. The National Procurement Strategy modernises outdated procurement procedure and make sense of procurement generally, elevating the term procurement to mean public service management. This means that there is now a wider strategic range of procurement options, meeting the requirements of section 135 LGA 1972 obligations, in response to the changing landscape and new horizons commissioning brings. The Sunderland approach embraced these advances electing to use full EU advertising, and in doing so has applied Article 81 of the Treaty of Rome. This in turn, allows for the use of Article 81(3). Article 81(3) allows for the exemption from competition law in the pursuit of efficiencies when direct benefits to the community and customers must also to be satisfied. The use of Part B rules does not allow the subsequent use of Article 81(3).

More than this the Sunderland approach has drawn down learning from the EU on social protection, of how issues of social welfare and global economy interact, and in doing is has become sensitised to the expectations of World Class Commissioning, Safeguarding and Social Protection. All this, when combined with the National Procurement Strategy recommended Provider Enablement Programmes, has put in place the necessary building blocks to achieve excellence in commissioning. Lastly, in many respects the Sunderland approach is not new. There are many authorities using Approved Schemes, its unique selling point is that it also provides the basis for continuous quality improvement. Having assessed and evaluated each provider’s overall competency, the Sunderland approach has relied as much on local track record, as well as each Provider’s own sense of optimal delivery and excellence, driving up local standards and creating leverage and strategic value to those organisations designed for the demands our communities face. Availability and Quality of Management Information Q: Is the intelligence available sufficiently comprehensive, complete and reliable enough to undertake such a programme? A: The impetus for the Sunderland approach was taken from an Audit Commission report in 2004. The report ‘Reducing the Local Impact’ concluded that ‘where local substance use services lack a shared vision or suffer from competition driven by individual personality, service delivery is inconsistent and incoherent’ ( Audit Commission 2004.) The platform created by Joint Strategic Needs Assessments, the competency based provider assessments of the Sunderland approach and the adoption of Provider Enablement Programmes now means that we are data rich and less reliant on beauty contest approaches to purchasing and commissioning. That base line data on spend in this service area has been clearly identified over recent years, the sub regional presence of the South of Tyne NHS PCT mitigates the realisation of outcome based approaches offering each local area the opportunity to take advantage of sound needs and demographic analysis, robust financial and quality management systems that offers visibility and transparency to commissioning and contracting for all stakeholders.

It will come as no surprise that in accurate data can and does negatively impact tender and commissioning process, outcomes of specifications or volume and coverage requirements may be unclear or change mid term, undermining transparency and confidence providers have in commissioning generally. This is often characterised by what is known as zero-sum gaming and is the heart of the Audit Commission concerns of 2004. Adopting the framework processes shown in diagrams one and three mitigates the integration of national programmes for commissioning, procurement and social protection. Internal Stakeholder Engagement Q: How will the various stakeholders respond to the introduction of new processes? A: The NECE recently reported that collaborative sourcing programmes for health and social care, across the NHS and local authorities are difficult to engage. Commonly difficult to manage as responsibility for procurement is devolved to Partnership specific commissioning teams, social care contracts teams or out sourced to another NHS body. Stakeholders are often concerned about losing control and harbour worries that they won’t have input into sourcing decisions impacting on their joint arrangements for decision making for setting and delivering local priorities. It is often felt that Partnership working is difficult enough without the added complication of trying to collaborate with one or more authorities. This is often the sole reason given for opting out of collaborative sourcing projects. The Sunderland approach mitigates these concerns by adopting a framework approach to commissioning in a specialised market category i.e. substance use. The merger of the three NHS PCT’s of Sunderland, Gateshead and South of Tyne into the South of Tyne NHS PCT adds further support to collaborative sourcing in the Strategic Category retaining local ownership in the Bottleneck and Routine categories and, depending on local need and market conditions, the leverage category.

Lack of Expertise and Resources Q: Most local Partnerships have dedicated teams handling these processes, so why do it differently? A: Subjective views about the credibility, expertise and competency of those handling contracting, procurement and commissioning processes can have a devastating impact on the people involved and in worst case scenario’s result in legal challenge. Adopting framework approaches mitigates staff burnout, provides a clean and transparent platform for action and enablement, builds capacity and identifies cashable savings in backroom and operational settings. The Sunderland approach, once agreed, was largely reliant on the confidence and capabilities of front line administrative staff in document handling, making use of existing clinical, operational and strategic expert groups that already met and existed. The Sunderland approach has an embedded Lean methodology and is compatible with models of public service transformation. Sustainable Resourcing Q: Lessons from the eighties and nineties, that saw an increased role for voluntary organisations, were reliant on close working relationships with LA staff which were costly and ineffective, interfered with competition and resulted in conflicts of interests. How is this different? A: The operating and policy environment is significantly different to the ‘contract culture’ of the eighties and nineties. Some local authorities and local NHS PCT’s have cited a lack of, and fear of, already scarce resources being drawn into ‘provider enablement’ that is not apart of their long term strategic financial plans, is time consuming and has historically been poorly managed. This is a major barrier to overcome and successful category sourcing is dependant on agreed areas of collaboration. The balance between locally determined planning and sub-regional planning is best understood and rationalised by using the category sourcing framework and attributing lead commissioning roles, with Bottleneck and Routine categories best suited to local area planning and leverage and strategic categories suited to sub-regional planning. Also, sine the eighties and nineties the legislative and policy framework has seen a significant shift with increased emphasis on

promoting democratic participation. The Local Government Public Involvement in Health Act 2007 making obsolete NHS responsibilities for public and patient involvement. The adoption or alignment of category sourcing, attributing local and sub-regional lead commissioning roles, should, in theory allow for the satisfaction of these new obligations and help in the satisfaction of existing s11 requirements. The broad balance of interests are shown in the utility formula’s below: Local Safeguarding + World Class Commissioning = Social Protection OR Urgency (Leadership + Innovation + Planning) > Managerialistic Opposition Leadership Q: What if this initiative is out of step with other local or subregional activities? A: The sub-region has a good track record of innovation and devolved responsibilities through the respective delivery groups for drugs and alcohol. The proposed new structure, to better align the strategic resources sub-regionally, does so without disabling local Partnerships or their respective delivery groups, offering the potential to give both the mandate and leadership needed to see this project through end to end. Collaborative leadership mitigates capacity issues that may be peculiar to local areas, drives forward the efficiencies agenda, avoiding duplication and making practical the workings of a sub-regional concordat that sets the scene for the replication of World Class Commissioning in to other service areas. Politics and Commitment of Joint Commissioning Manager’s Q: What is wrong with dong our own commissioning? A provider’s performance in one area does not mean they will perform in the same way in another. A: There is a significant amount of competitiveness and relationship complexity, borne out of historical boundaries and rapport building within Partnerships and with regional government. Anecdotal evidence suggests that Joint Commissioning Managers play an important role in getting the best out of their local providers and

Partners and performance in one area is not a real measure for elsewhere. Also, JCM’s for drug and alcohol services have a good track record in taking ownership and asserting their authority to meet stakeholder, regulator and performance management expectations and ‘letting go’ or sharing these responsibilities will be unfamiliar territory and maybe outside their comfort zone. The formation of sub regional management meetings for this expert group mitigate support for change. The Sunderland approach adopted a ‘Provider Enablement Approach’ and where the competency assessment showed a solid overall organisational track record and poor local delivery or vice versa remedial action plans were used to mitigate the differential. The provider enablement programme has also been used to harness otherwise ‘isolated’ pockets of service provision to ensure strategic relevance. The adoption of the category sourcing framework at a sub regional level will mitigate a commitment to a sub-regional picture. Any failure to do so may result in sub-optimal results, jeopardises local Partnership performance ratings and undermine wider NHS reform and Local Government modernisation agenda’s. This critical area will need full buy-in from this expert group.

Part Four: The Programme - Scope of the decision making for a sub-regional concordat This programme aspires to the development of a sustainable SubRegional collaborative specialist category sourcing programme for substance misuse to: •

Deliver a better deal for Strategic Partnerships and the South of Tyne NHS PCT by understanding, managing and leveraging the xxxxx identified annual spend on bought in substance misuse services currently bought separately but provided subregionally

• Deliver co-ordinated, intelligent and efficient local and subregional approaches to market management, releasing xxx, over 3 years to support front line delivery in tacking substance misuse problems

• Drive forward the adoption of Excellence Models by the provider market in order to realise the back office process efficiencies and satisfy the requirements of World Class Commissioning • Deliver consistently high calibre, value for money and world class contracts for everyone • Optimise procurement activities into a collaborative, performance management framework, removing duplication and reducing resource requirements by as much as two-thirds for non-lead commissioners • Offer a strategic approach, driving forward world class commissioning transforming local delivery and delivering the Public Sector Transformation agenda’s. • Embedded collaborative procurement and World Class Commissioning, sharing expertise and knowledge with a public service and performance management ethos • Shape procurement sourcing requirements into a strategic forward plan to maximise opportunity to stimulate the subregional delivery of broad policies; drive innovation and market shaping, supporting local regeneration, addressing inequality and promoting social protection. • Optimise cashable savings and mitigate the risks of sustaining the savings ensuring Third and Fourth Sector providers with a commitment to world class commissioning and predicated outcomes that are truly designed for demand and meet patient and customer need. In the medium term, having harnessed the category sourcing into a cyclical programme, the opportunity will present itself to review the organisation of procurement and commissioning skills and capacity across the sub-region and transform this activity into a fit for purpose structure for world class commissioning of future delivery in substance misuse services.

Adoption of a framework approach To achieve a sub-regional category sourcing programme the South of Tyne NHS PCT, the three participating local authorities and their Partners would need to adopt, in whole or part, the framework approaches of the Sunderland Approach. This is not the adoption of the findings of the Sunderland APPS process but rather the adoption of the framework process for category sourcing and the application of a specialised exercise targeting the development of a high level strategic category of third party provider partners. The feasibility appraisal, detailed above, does not support the adoption of sub-regional activity within the service areas characterised as Bottleneck or Routine categories, the leverage category will, having identified those suitable for inclusion in the Strategic category, have increased importance in future years as the use competition and population need may necessitate movement between the categories and a re-freshed standing list developed in meet new market conditions and population need. Based on the feasibility of a sub-regional approach bringing the intended benefits in the Strategic Category the following is recommended: Recommendation One Adopt the framework process of the Sunderland approach for category sourcing for the Strategic Category, using Article 81(3) exemptions to ensure cashable savings are realised. Recommendation Two Develop a Sub-Regional (Strategic Category) standing list owned by the South of Tyne NHS PCT Recommendation Three Take advantage of the Strategic Category programme, building on the Sunderland approach, to agree the form and content of a subregional concordat. Using in whole or in part the Sunderland

approach to total quality management.

This is shown in Diagram Four below:

Adapted from The National Procurement strategy/NECE/Duncan Olive June 2007 and re-used in Using P4 Methods to Establish Strategic Control of Commissioning Process, Ale Fraher 2008

Strategic Category Sourcing - The Process This process will include a comprehensive and systematic market category review of prioritised Providers demonstrating core competencies for inclusion on the Strategic Category ‘standing list’ of providers.

Each expert group review will include: • Spend baseline review • Assessment of current area commitments • Assessment of available contract options, transition or migration arrangements • Assessment and risk appraisal of the category sourcing benefits, impact on current arrangements and provider suitability The Approach This will be a strategic commissioning activity, with the newly configured sub-regional meeting of JCM’s and Head of Service acting as the expert group, for the market identified as ‘Strategic Category’. The focus will shift from the day to day and year by year management of existing contractual and procurement arrangements to managing markets and optimising outcomes. In the short term the approach is concerned with leveraging spend and optimising sub-regional delivery, with all the benefits that this will deliver. The approach will make available information from the Sunderland APPS, aggregating other standing lists and inviting providers to update or re-fresh their portfolio’s against set criteria. The criteria set will concentrate on the providers ability to demonstrate: • Excellence in drawing down funding, for the benefit of themselves and others • Excellence in employee and staff management • Excellence in customer/patient care, treatment and management Diagram Five shows the steps in this process: Diagram Five

Recommendation Four The evaluation and assessment criteria of Strategic Category providers is as follows: • Excellence in drawing down funding, for the benefit of themselves and others • Excellence in employee and staff management • Excellence in customer/patient care, treatment and management The master score system (balance scorecard) from the Sunderland APPS is available or can be adapted for use.

Recommendation Five The sub-regional meetings of the Head of Service and JCM’s could serve as the Expert Group, with representatives from the three local Joint Commissioning Groups nominating one local government representative, a clinical specialist and nominated provider side representative to form the Quality Assurance group. Procurement expertise will be sought from City Hospital procurement team. NB The omission of user/carer representation is a reflection of the shift in statutory obligations arising from the Local Government and Public Involvement in Health Act 2007, the local government representative, it would seem now has these responsibilities.

Part Five : Project management Governance Effective project and subsequent category programme governance will be accomplished by addressing the following as an embedded part of the project implementation: Project/category programme management and control Project/programme assurance Quality management Stakeholder management Issue Resolution and Risk management Performance management Benefits management Programme Organisation The stakeholders and people involved in the Project Board(s), Quality Assurance Group and Expert Group are all embedded features of the existing structures, placing minimal demands on time but maximising their respective executive roles. The value offered by City Hospitals procurement expertise and guidance was fully recognised through out the Sunderland APPS, providing the legitimate body for approving and safeguarding fair play through out. The procurement team at City Hospital is central to the delivery of the programme.

The organisation of this project and future running of the programme has been designed to make efficient use of current governance arrangements and resources. Stakeholder Engagement and Communication Strategy To optimise the effectiveness of this project it will be vital to put in place effective communication to all stakeholders. Good communication from JCM’s within their local area will be complimented by provider briefing sessions, followed by a ‘category sourcing white paper’ and application for inclusion. Project Control This project will managed in accordance with the PRINCE 2 project management guidelines. Project Methodology The project implementation is in accordance with PRINCE 2 project management guidelines Project Review Meetings The project will be reviewed by the Project Board (the sub regional meeting with JCM’s) with day to day back up offered by the JCM for Sunderland, administrative support will be offered by the Safer Communities Team. Quality Assurance Reports will be provided via the Project Board to local Joint Commissioning Groups at planned intervals. Change Control Should there exist a need for a significant change to the project, a Change Request will be raised and reported to the Project Board.

Part Six: Approval and Permission This Project Initiation Document has been read and signed off by the following signatories: Head of Service for South of Tyne NHS PCT Head of Strategic Finance for South of Tyne NHS PCT Head of Procurement City Hospitals Joint Commissioning Managers for each participating local area.

Part Seven: About Alec Fraher and Associates Ltd Alec is an experienced associate consultant who has worked effectively across all client groups and in both voluntary and statutory provider services, more recently his working focusing on the purchase of both social care, housing and health services He has been involved in a number of Authorities with a brief to analyse existing service provision, lead on the procurement and commissioning of services from various sources internal and external to organisations. He has strong background in Partnership working across Health, Social Care and Housing, and safeguarding experience dating back to the mid nineties when Alec held a number of honorary hospital manager posts as the head of advocacy services in a range of secure psychiatric settings and more recently handling the transfer of and divestment of public sector services to the independent sector. He is a registered social worker and holds a graduateship in, Public Service Performance Management and Transformation and is an accredited Cipfa performance manager. . Key Achievements • Author and Architect of Better, Brighter Futures, a transformational tool used in the redesign of drug and alcohol services. • Process mapping and service redesign for homecare services to Older People ,Learning and Physical and Disabilities, including Sensory Impairment • Design and setting up of Approved Provider schemes for Older People, People with Learning Disabilities and Adults with Mental Ill Health • Safe transfer of 5000hrs of home care services to the independent sector and market alignment • Validation by National Institute for excellence in Mental Health in England and Wales for the design of an inclusive accreditation tool. • Co-author of Models of Excellence for Care Home Management • Author of P4 – A Transformational Method for Whole System Improvement

Alec’s associates for this assignment are Dr Phil Barden, a world renowned Performance Management expert. Phil will provide external validation of the methods and processes used in this exercise. Geoff Beacon, Beacon-Dodsworth. Geoff is a soft ware developer and demographics expert, he and his colleagues have a solid track record in the analysis of large data sets, having undertaken work in North West England examining the links between geographic deprivation and health inequality. Geoff has a long standing concern about health inequality among the alcohol/drug misusing population and those with metal health problems.