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Vive la devolution: devolved public-services commissioning

The way public services are commissioned is fundamental to their success. Commissioning is the design, procurement (where there is a purchaser-provider split) and evaluation of public services. In many cases, such as in healthcare, employment-services and offendermanagement programmes, this split exists, but the commissioning structures are not in place to achieve value for money for the over £335 billion spent each year on public services.

This was the finding of Reform’s previous research, Faulty by design. The state of publicservice commissioning, which argued that the way public services are commissioned is fundamentally flawed. Commissioners do not focus on outcomes, rather rewarding provider inputs (such as activities), or outputs (such as waiting times), rather than outcomes (such as quality-of-life improvements). The funding of services is fragmented, with different bodies commissioning services to achieve the same end (including duplicate programmes being commissioned), or gaps in services in other cases (where separate commissioners assume it is each other’s responsibility). Despite aims to devolve elements of commissioning public services, to areas such as Greater Manchester, the centre still controls the design and functioning of services through national contracts and targets, for example. All together this means that commissioners have not worked with providers to tailor service design to outcomes that matter to everyone using public services.

A radical new offer is needed. The devolution agenda in England should be drastically accelerated. Commissioners need the power to design contracts for providers to meet local needs most effectively – in healthcare, employment services, skills and offender management. This requires commissioners to hold non-ring-fenced budgets, with maximum freedom to design contracts to offer to competitive public-service markets. This will only flourish if commissioning areas are designed to cover geographies requiring similar interventions, and governed by single, integrated and accountable commissioning bodies.

This is more a change of tune than a tearing up of institutional arrangements. Unitary authorities or combined authorities can be responsible for commissioning services, totaling over £100 billion in 2016-17 spend. These would replace complex local commissioning bodies, such as Clinical Commissioning Groups (CCGs) and Police and Crime Commissioners (PCCs), and allow commissioners to integrate service design. New local authority structures can cover 38 areas, which have similar healthcare and employment needs. This transfer of funding from central to local government would be followed by the abolition of NHS England, a commissioning organisation. The centre must take a light-touch approach by setting high-level outcomes, for local commissioners to tailor to their areas. International moves to a more devolved state suggest this can be completed in 15 years, with the right support.