ACEVO (the Association of Chief Executives of Voluntary Organisations) launched its report in March on ‘alliance contracting’, but what on earth is it and why might it be relevant to social enterprises and other third sector bodies?
To answer those questions, it’s worth being aware of a couple of important documents relating to the NHS that were issued towards the end of 2014. The first one was the NHS Five Year Forward View, which set out the challenges to the NHS and the need for further change. The second was the so-called ‘Dalton Review’, the main title of which was ‘Examining new options and opportunities for providers of NHS care’. Both have a common thread of ‘integration’ and alliance contracting is proposed as a key way of achieving it. As explained below, alliance contracting is not actually new, though its application to the NHS is.
It wasn’t that long ago that NHS services were provided by NHS bodies. There were private healthcare providers too, of course, but the landscape was reasonably straightforward. Then followed the decision to get rid of Primary Care Trusts which in turn led to a number of health services being run by a range of providers including social enterprises formed under the ‘Right to Request’. Since that time, things have got even more complex with private companies and GP provider companies coming in to the mix too. The future envisaged under the Forward View and Dalton is that we will need new models of care to meet patients’ needs going forward.
So, what is alliance contracting and why did ACEVO bother writing a report about it? Unlike a traditional contracting model whereby the commissioner is removed from the delivery process, risk is transferred as much as possible to the provider, and decision-making could be said to be based on ‘what is best for me’, the alliance model takes a different approach. Here, the commissioner is closely linked to the delivery team, risk is shared, and decision-making should be based on ‘what is best for the project’.
Though new to the NHS and to other public services, this kind of approach was actually introduced by the oil company BP in the 1990’s as a way of helping to bring a co-operative rather than adversarial approach to certain problems it was facing. Alliance contracting models have since been widely adopted in respect of public services in both Australia and New Zealand.
A desire for more integrated care in health and social care services is at the heart of the alliance contracting model in the NHS context. This means models where there is genuine collaboration between multiple partners whilst looking to achieve longer-term or outcomes-based goals. It is an alternative to putting things in small lots (popular with smaller providers but much harder for commissioners to manage), tendering out to one enormous provider who will do everything itself, and also an alternative to the current common approach of one lead provider and a series of sub-contractors (or even sub-sub-contractors).
Successful alliance contracting needs the different bodies to collaborate with one another with a view to achieving a common goal, and this is a key part of what commissioners will be looking for. In recent years particularly, with shrinking grants and moves from commissioners towards tendering in larger lots, third sector bodies have had to learn to collaborate to survive. This is one way in which the world of social enterprise can offer something valuable to this type of approach. Again, with a trend towards outcomes-based commissioning in contracts, the third sector has something to offer (particularly those who have sought to understand and embrace reporting of social value). On top of these things, there are of course many social enterprises who directly provide health and / or social care services so there are opportunities on the direct provision side of things too.
There is a genuine opportunity for social enterprises and other third sector bodies to be involved in helping to shape the changing NHS. As with most things in life, there are two options: to be proactive and be part of the changes, seeking to influence it in a positive way, or to sit on the sidelines and wait for others to make the important decisions. If you’re in the latter camp, then the answer to the question ‘what’s next?’ is to do nothing at all; otherwise, it’s a case of engaging with local commissioners and letting them know what you can offer. Surely, it’s better to be round the table early rather than waiting till it is too late and others have done the talking for you.
Could this whole alliance contracting idea turn out to be the latest fad in the ever-changing world of the NHS, something which is popular now but forgotten in a few years’ time? Maybe, but there’s only way to find out…
ABOUT THE AUTHOR
Simon Lee, Hempsons Solicitors
Simon has provided legal advice to social enterprises, charities, and other community and voluntary sector bodies for over 10 years. He is passionate about the sector and is able to advise on a wide range of matters affecting such organisations including legal structures, contracts, funding and governance issues.