In 2016, the New South Wales Treasury established a Commissioning and Contestability Unit (CCU) to assist with the improvement of public services by exploring delivery models including a mix of government, NGO and private sector providers. Last year’s state budget allocated $2.9 million to create this team, with the expectation that this investment should release efficiency savings. A key role for the CCU is to help the government decide which areas of service delivery to outsource or externalize through commissioning approaches.
Late last year the CCU released papers outlining the policy and a supporting practice guide, developed to assist practitioners in applying commissioning and contestability. I was one of the individuals approached asking to feedback on these documents as they were being developed and was interested to see their publication and what will be developed in this space in the coming months and years. These are pretty helpful resources for anyone working in a commissioning role at present.
The policy aims to create a platform to support NSW agencies to explore ways to create better services outcomes. This policy suggests that this will be done through the use of commissioning and contestability to apply rigour to the design and funding of services. What is welcome in this policy is that this does not suggest that services should be outsourced or externalized, but that consideration should be given to where best particular services sit. This may involve moving some services out of government, but could also involve moving some back to government from third parties if the intended impacts are not being generated.
The policy goes on to set out a set of principles that should shape service delivery reform across NSW Government, namely:
· commissioning of services should focus on improving outcomes and delivering quality services, regardless of organisational boundaries and constraints
· Government must act in the interest of customers and the community by putting them at the centre, with greater attention to the integration of services and an improved end-user experience
· productivity, quality and efficiency benefits should be shared with the customer through service improvements as well as being reinvested in Government priorities
· effective commissioning will clearly define and prudently manage delivery and financial risk
· commissioning will encourage innovation and an openness to more diverse service delivery models in the public, private and not-for-profit sectors. These models should be flexible, reflect the needs of the customer and recognise the limitations of certain markets
· contestability allows Government to challenge existing providers to deliver service outcomes within agreed resources
· agencies should consider their role as policy-maker, commissioner, regulator and provider and whether a separation of roles would be of benefit within the service design.
Ultimately this policy aims to support agencies to achieve consistency and practice across the entire government. Definitions of commissioning and contestability are set out in the policy document in a clear and accessible way and there is a clear sense of what these roles mean in terms of the changing role of government. In doing this the CCU does a good job of getting to grips with some fairly complex ideas and presenting a level of nuance to debates around commissioning that have at times been absent in recent years.
The practice guide that accompanies the policy provides a foundation for consistency in understanding what commissioning and contestability are and the key steps to consider when commissioning and contesting services. There is a clear outline of when commissioning should be used, what the process entails and importantly the key questions that agencies may wish to ask at the different stages of the commissioning process. This last aspect is key. Not all commissioning processes will look the same or involve all of the same activities and considerations. One size does not fit all. These questions are a helpful guide to those driving commissioning processes, supporting individuals and teams to take ownership of these processes. There is also the unpacking of consumer choice, potential funding models and contracting approaches, understanding of markets and how these operate and issues of contract management. One of the key sections for me relates to capability for commissioning and contestability, in terms of what agencies will need to operate such an approach.
The practice guide won’t transform the way that NSW agencies work over night; this is a big task after all. However, this is one of the more useful guides that I have come across recently for those who are seeking to make a reality of a commissioning approach. If you are in this field I would certainly suggest that you take a look at it. Further resources will need to be developed to sit alongside this to enable agencies to engage with this activities and my understanding is that this is on the agenda of the CCU. All in all it seems like NSW is doing some pretty exciting work around this space and I will be interested to see just what happens next.