Outcomes & Efficiency

1. Outcomes& Efficiency Accelerating the delivery of better outcomes & efficiency through commissioning Full Pack – March 2011 v22www.commissioningsupport.org.uk

2. The Perfect Storm 10+ years of increased spend Rising public expectation ~28% budget cuts Increase in demand

3. Change is Complicated by… • Reducing headcount and changing local services often paralyses staff • Emerging Government policy and new relationships with the public • Leaders often set efficiency targets through input-based salami slicing rather than outcome-based commissioning approaches • Capacity and capability across central and local government to achieve efficiency savings at the same time as improving outcomes is limited • Across government there is a lack of commercial skills, or these are not drawn into commissioning • Small local areas often fail to collaborate with others to manage the market and secure the best deals • Non statutory services such as early intervention and prevention are often the first target for savings • Local partners under financial pressure often become insular • Efficiency savings through commissioning require a thorough understanding of resources, costs, needs and desired outcomes • Providers are vulnerable to turbulent markets and reduced cash flow

4. Contents • Executive Summary • Commissioning Journey • Change Management • Capacity and Capability • Accelerated Commissioning • Quick Wins • Appendices

5. Outcomes& Efficiency I. Executive Summary

6. Executive Summary Approaches to Efficiency Simple Less effective • Historic • Salami-slicing and cuts • Higher thresholds to control demand • Stronger procurement and negotiation • Back office reductions • Delayer management and freeze posts • Emerging • Category management (procurement) • Shared services and collaboration • User centric design • Lean and Systems thinking • Community Budgets / Total Place • New relationships between state and citizens Complex Effective

7. Executive Summary What’s the Solution? • If you cut without understanding the system, then you will cut value and not waste • We need a way to make savings whilst continuing to improve outcomes for local residents • We need to bring together national agendas on efficiency, Big Society, Community Budgets, QIPP, commissioning, collaboration, integration, etc • The DfE / DHCommissioning Support Programme has worked with all local areas to create a sustainable improvement in strategic commissioning • We have developed the Outcomes & Efficiency methodology with leading commissioners to: • accelerate the commissioning journey of all local areas • meet efficiency targets, • build the emerging service models, and • deliver sustainable improvement to the outcomes for local communities

8. Executive Summary Outcomes & Efficiency

9. Executive Summary Unique Features of the CSP Model • Designed for all local services (children, adult, corporate, NHS, justice...) • Similarities with Community Budgets / Total Place: • looking at the total resource (money, people, buildings) • co-production – working with communities and families • rebalancing citizen / state relationships, and • redesigning the system around communities and the end user • Builds in change from the start • Builds in implementation from the start • Manageable and realistic – not biting off more than you can chew • Goes beyond transactional savings by taking advantage of systems design, using existing staff, residents and governance arrangements • Acceleratesthe commissioning journey that local areas are already taking • Based on our real experience of using commissioning to design whole system change – a proven approach

10. Executive Summary Benefits • Short term (3 to 6 months) • Cashable savings • Medium term (6 to 9 months) • Accelerated outcomes and efficiency • Long term (18 months +) • Sustainable outcomes and efficiency

11. Executive Summary Summary of Workstream Activities • Change Management • Extensive engagement / 2-way communication with frontline staff, residents and communities • Shared vision and burning platform for change: inspire • Focus on cultural, emotional and political components of change • Embed activities and behaviours • Capacity and Capability • Building corporate or directorate Joint Commissioning Units (or other function) with size and skills to deliver accelerated commissioning • Building shared teams with partner organisations • Training professionals in commissioning, system design and change • Accelerated Commissioning • Review all needs and all resources • Design the new system and commissioning strategies • Quick Wins • Identification, analysis, implementation planning and delivery of early cash savings using quick / easy methods

12. Executive Summary Implementation • This is hugely challenging – but with great potential for improvement, and it is likely that all local areas will have to do something like this in the next few years as the impact of the cuts start to bite • Realistically it takes six to nine months to develop a new system design • The Outcomes & Efficiency methodology is generic and must be adapted to each local area – estimates of teams, roles and days required will vary for each local area and figures in this pack are suggested as a guide • Commissioners should build on corporate transformation programmes and resources from all partners – embracing local strengths, practices and culture • The Outcomes & Efficiency model is scaleable and transferrable to other whole system redesign programmes in local and national government – it brings together efficiency, Big Society, Community budgets, QIPP, radical efficiency, commissioning, collaboration and integration into one programme – reducing your to-do list

13. Executive Summary Practical Steps – a Summary • Scope the programme and set up governance and groups • Engage and inspire staff and users so they design and own the changes • Build capacity and capability of the commissioning groups • Develop your understanding of resources (money, people, buildings), needs and consultation • Set out user pathways from -9 months to 99 years in your area • Build the commissioning principles, vision, priorities and statutoryrequirements to steer commissioning groups • Design commissioning questions that will transform services, and develop these into commissioning strategies • Create cost-benefit analysis and implementation plan for strategies • Identify efficiencies once the system has been redesigned • Implement and embed: review performance, keep communicating and managing the change

14. Executive Summary Risks • The scale of challenge is demoralising and could be seen as too great by some – this is an unprecedented level of change and is really hard • Not enough expertise in whole system transformation in the local area • Potential for legal challenge if stakeholders do not own the change process from the beginning • Procurement restrictions may delay implementation of the new design • Up-front investment in capacity and capability may not be quick enough or sufficiently resourced to achieve the benefits • Cultural challenges may prevent effective implementation, e.g. bottom-up change, systems thinking, empowerment of frontline staff, innovation and managed risk taking • Early cuts could undermine the benefits of longer-term system redesign if they are handled badly • Some local areas will not be agile enough

15. Executive Summary What are Local Areas Saying? • “We have benefited from CSP’s expertise and support to deliver our Children’s Trust commissioning ambitions. Now CSP is working across the Council and partners using a whole system approach [O&E], for our transformation to a commissioning led organisation.” – Margaret Carney, CE • “Here at Surrey we have found this is the approach that works best with our politicians.” – Sean Rafferty, Directorate Head of Strategy & Commissioning • “We see a real synergy with the proposed approach and our current concerns. It’s a positive model for exploring accelerated commissioning – we are looking forward to working with the Commissioning Support Programme in developing the model.” – Brian Grady, Head of Commissioning & Procurement • “We have begun work with CSP and can already see the potential benefit of using this approach to establish intelligent commissioning practice, and to bring rigour to the process of achieving more efficient and effective service delivery models.” – Andy Couldrick, DCS

16. Executive Summary Why CSP Outcomes & Efficiency Works • Pragmatic application of systems thinking • Quick – because the design is at a systems level, and you don’t need to map everything or run a separate change programme • Flexible – pick and mix your services for redesign • Buildson strengths of local government and communities • A top-down approach to change would cost too much and take too long, this is a top-led bottom-up design that is owned by local professionals • Hardest activities are completed in parallel, e.g. analysis, design, change, getting staff on board, implementation preparation • Gives a framework for reference and cross-checking • Not a generic consultancy approach – this is designed by the sector

17. Executive Summary Top 10 Tips • Salami-slicing will cut value from your services more than waste • System change has a long lead-time – start now • Work from the start with partners, professionals and residents – make sure the problem, development and solution are shared • Build your Joint Commissioning Unit or other commissioning function • Systems thinking will be a culture change for staff and communities • Lead, engage and demonstrate the new model • Empower professionals, partners, residents – nurture your change agents wherever the are – they must own the solution • Look at what you can influence, not just what you control • Seek out pragmatic and entrepreneurial solutions • Design around the end user – see through the child, family and community’s eyes You can deliver both Outcomes & Efficiency

18. Outcomes& Efficiency II. Commissioning Journey

19. Commissioning Journey Commissioning Journey • Every local area is part way through their commissioning journey • The commissioning journey: • Is developing equally across central and local Government and the NHS • Covers the spectrum of efficiency approaches and is particularly suited to Community Budgets, user centric design, rebalancing state / citizen relationships, lean and systems thinking • Enables the public sector to deliver “more for less” by deriving new service models • But, in application commissioning can be too slow to redesign and change the system in current timescales

20. Commissioning Cycles Commissioning Journey

21. How can Commissioning Help? Commissioning Journey ‘Commissioning is the process for deciding how to use the totalresource available for families and communities in order to improveoutcomes in the most efficient, effective, equitable and sustainable way.’

22. Future Efficiencies – Resources Commissioning Journey • Understanding the resources available and disaggregating budgets • Making best use of all resources including finance, workforce, providers and the market place, buildings, community assets and co-production • e.g. How many buildings are used to improve older people’s outcomes – are these in the right configuration? • e.g. Parents deliver more outcomes than any other part of the system – do we have the right support to maximise this co-production?

23. Future Efficiencies – Targeting Commissioning Journey • Know your residents – individually and across the population • Targeting the right point in a person’s pathway to ensure that universal and specialist resource is used most efficiently and effectively, e.g. through early intervention • Targeting the population that is most in need, narrowing the gap, and ensuring resources are not wasted on those that do not need help • e.g. In one local area 70% of looked after children came from 26 families over a 10 year period – how could we target and use that resource better?

24. Future Efficiencies – Mechanisms Commissioning Journey • Improving our use of commissioning and procurement mechanisms, e.g. frameworks, cost / volume contracts, service level agreements with internal services, market management, influence, co-production agreements, behaviour change • Developing commercial skills across the public sector • e.g. Local areas that replace spot-purchasing with blocks or frameworks generally save 10 to 20% and improve outcomes • e.g. On average, less than 10% of local public money is controlled by Councils – how can we influence the other 90% to achieve outcomes?

25. Future Efficiencies – Whole System Commissioning Journey • Using approaches such as Community Budgets / Total Place to map all resources across the system that can be influenced, understanding pathways and through life costs • Using more sophisticated system design methods, rather than silo teams, organisations and service design • Partnership working and collaboration with neighbours • e.g. Agency staff costs are driven up by competition between local authorities – how can we collaborate to manage the market? • e.g. Costs are often driven by repeat referrals – can we redesign / reduce?

26. Outcomes& Efficiency III. Change Management

27. Change Management • Activity • Extensive engagement / 2-way communication with frontline staff, residents and communities • Shared vision and burning platform for change: inspire • Focus on cultural, emotional and political components of change • Embed activities and behaviours • Deliverables • Newsletters, events, etc • Change plan for engagement, local culture and commissioning strategies • Resources • 1 communications lead • Engagement phase for 9+ months Change Management

28. Tools • Change programmes often go wrong and don’t deliver the improvements envisaged – in industry the failure rate is up to 70% • The change management workstream uses bespoke tools and diagnostics to ensure benefits are delivered, such as the change burger, change curve and Change Management Jigsaw Change Management

29. Check Out The Change Curve Optimism / Active Completion Uninformed Optimism Change Management Denial Commitment Shock Informed Optimism Enthusiasm Anxiety Informed Pessimism Relief / Anxiety Hopeful Realism Resistance Time Depression Acceptance Pessimism / Passive Source: Kubler-Ross

30. Processsystems, procedures, processes, plans Peoplebehaviour, attitudes, emotions, thinking, communication, collaboration, beliefs Change Burger Change Management Task (change) A B Source: Cockman, Evans & Reynolds

31. On the Boundary? Outside? Inside? Gestalt Model of Intervention Change Management Area, Service or System Source: Edwin Nevis, OrganizationalConsulting, Gestalt Press 2001 (adapted)

32. BURNING PLATFORM Apathy & complacency VISION Lack of direction or coherence so change fizzles out LEADERSHIP Poor alignment & inertia Change Management CAPACITY & CAPABILITY Anxiety & frustration COMMUNICATE & ENGAGE People feel thechange won’t affect them OWNERSHIP AT ALL LEVELS Poor design that won’t last QUICK WINS Cynicism that change is possible & disbelief PERSONAL IMPACT Lack of individual commitment EMBED CHANGE SO IT’S BUSINESS AS USUAL Revert to the old ways Key: ESSENTIAL FOR CHANGESymptom of missing piece Source: DfE

33. Outcomes& Efficiency IV. Capacity and Capability

34. Capacity and Capability • Activity • Building corporate or directorate Joint Commissioning Units (or other function) with size and skills to deliver accelerated commissioning • Building shared teams with partner organisations • Training professionals in commissioning, system design and change • Deliverables • Effective Joint Commissioning Unit / commissioning function • Commissioning Group members are trained and confident • Resources • 2 months to move staff, establish links to other functions (e.g. procurement), form team and Commissioning Groups • 1 week of training Capacity & Capability

35. CSP Materials to Support Training • CSP Commissioners’ Kitbag • Comprehensive set of tools, guides, good practice and other resources for commissioners developed over the life of the commissioning support programme • CSP A-Z of Commissioning training programme • 23 modules of basic commissioning training designed around “Good Commissioning: Principles and Practice”; includes efficiency training in modules B1, B2, B3, B5, C1 and C5 • Special modules on Outcomes & Efficiency and Decommissioning • CSP Individual Skills Assessment • Go to www.commissioningsupport.org.uk Capacity & Capability

36. Innovation and entrepreneurial designs What Capability do you need? Designing models with end users System architecture Collaborating with providers Securing procurement skills Shaping and managing the markets Promoting improvement and innovation Specifying and measuring outcomes Capacity & Capability Leading the whole system Implementing project and change management Mapping resources Prioritising investment Engaging and drawing on experience of community leaders and partners Managing knowledge and assessing needs Making sound financial investments

37. What type of Thinking do you need for Commissioning? • Left Brain • Bureaucracy • Systems • Politics • Planning • Rule compliance • Analysis • Formality • Order Right Brain Autonomy Ownership Risk taking Rewriting rules Informal Synthesis Intuition Trust Capacity & Capability Source: Entrecode

38. What type of Leadership? Capacity & Capability Source: John Kotter

39. Encouraging Innovation Targets What, but not how Specific call for innovation Tie to strategic plan ‘Stretch’ Clear case for need Risktaking Emotional support Balanced assessment Learning from failure Trying new things Information Wide scope search Uncensored, unfiltered, unsummarised Free-flowing Resources Funding Time Authority to act Capacity & Capability Flexibility Process Training Encouragement for skills development Tools Aligned with organisational goals Recognition Intrinsic motivation Individualised Rewards Honouring everyone’s input Diversity Trusting, open environment Team based work Relationships

40. Outcomes& Efficiency V. Accelerated Commissioning

41. Accelerated Commissioning • Activity • Review all needs and all resources • Design new system and commissioning strategies • Note: scalable – can be split by age / directorate / service categories • Deliverables • Resource Databases • Needs and Consultation Databases • Commissioning Strategies including implementation plans • Resources (for each directorate) • Core team of ~5 commissioners • Resource owners (finance, property, etc) • 100 frontline staff and users for 0.5 days / week • 6 months Accelerated Commissioning

42. Accelerated Commissioning • The commissioning cycle of understand, plan, do, review can often take up to 2 years for a small service area. Accelerated commissioning applies the same process and principles to a whole directorate or local area in a 6 to 9 month timescale. • Accelerated commissioning works by enabling a top-led bottom-up design of services at a systems level, and ensuring that many of the activities are completed in parallel • Information describing needs, voice of the user, resources and pathways is required to understand the system • Commissioning strategies are set out by Commissioning Groups comprising frontline professionals that work in the services and users • Identify efficiencies after the system is redesigned Accelerated Commissioning

43. Why is System Design so Hard? • Peter Senge: • From an early age we are taught to break apart problems, to fragment the world. This apparently makes complex tasks and subjects more manageable, but we pay a hidden, enormous price… • We tend to focus on snapshots of isolated parts of the system and wonder why problems never seem to get solved… • Dividing an elephant in half does not produce two small elephants! • The current culture of local government is not systems based, but linear, e.g. silo teams, command & control management, 30 specialists working with a family, etc • We cannot map all of the system nor fully understand it – system design is about abstracting functions, taking a horizontal view of services, empowering elements of the system to deliver, and influencing those elements. This is a huge culture change. Accelerated Commissioning

44. Analysis & Strategy Needs and Consultation Databases Resource Databases Pathway Analysis Commissioning Principles Commissioning Questions Accelerated Commissioning Commissioning Strategies ✔ Outcome Report Cards

45. Analysis & Strategy Needs and Consultation Databases • Example of key tools and strategies for Accelerated Commissioning • These may describe a whole local area, a directorate, a locality, an age range, or a population • This model is scalable, but we would not recommend using it for a single service area as solutions will be constrained by service boundaries • Tools and strategies are developed by Commissioning Groups to inform the final system design Resource Databases Pathway Analysis Commissioning Principles Commissioning Questions Accelerated Commissioning Commissioning Strategies ✔ Outcome Report Cards

46. Needs & ConsultationDatabases Needs and Consultation Databases • Review previous needs assessments for the service area being transformed • Review headlines from previous consultations to capture the voice of users and the community, e.g. common assessment framework, community surveys • Include all views in a single database, coded by themes • Supplement with targeted questions to professionals, residents and communities • Database informs the development of Commissioning Questions and Commissioning Strategies Resource Databases Pathway Analysis Commissioning Principles Commissioning Questions Accelerated Commissioning Commissioning Strategies ✔ Outcome Report Cards

47. Resource Databases Needs and Consultation Databases • List of resources that commissioners can direct or influence to achieve outcomes • Includes: • All finance for all partners in one spreadsheet • All properties used by particular groups of services (e.g. adults) • All workforce (including front-facing, back-office, external providers and markets) • Informs the Commissioning Strategies • Set up a Commissioning Group for each Resource Database Resource Databases Pathway Analysis Commissioning Principles Commissioning Questions Accelerated Commissioning Commissioning Strategies ✔ Outcome Report Cards

48. Pathway Analysis Needs and Consultation Databases • Review local pathways from -9 months to 99 years through the services being redesigned • Develop example case studies to illustrate pathway • Set the outcomes that are expected for residents and communities at different points in the pathway • Pathway should be designed from a user perspective – not a service perspective • Informs the Commissioning Strategies, Outcome Report Cards and performance management framework Resource Databases Pathway Analysis Commissioning Principles Commissioning Questions Accelerated Commissioning Commissioning Strategies ✔ Outcome Report Cards

49. CommissioningPrinciples Needs and Consultation Databases • Overarching and guiding principles for the system design to steer Commissioning Groups and the Commissioning Strategy development • Principles should include statutory requirements from Government, and key priorities from local plans such as the Community Strategy • Principles should include a compelling vision for improving local outcomes which will motivate staff, users and communities Resource Databases Pathway Analysis Commissioning Principles Commissioning Questions Accelerated Commissioning Commissioning Strategies ✔ Outcome Report Cards

50. CommissioningQuestions Needs and Consultation Databases • High level questions to be tested by Commissioning Groups that describe the design for future services • Based on early review of the Commissioning Principles, Pathway Analysis, Needs and Consultation Databases, and Resource Databases • Can also be developed through Outcome Based Accountability style focused discussions with frontline providers, families, community groups • Additional Questions will be generated by Commissioning Groups – expect ~200 for each directorate by the end of the Programme Resource Databases Pathway Analysis Commissioning Principles Commissioning Questions Accelerated Commissioning Commissioning Strategies ✔ Outcome Report Cards