Commissioning and procurement: what are the risks?

Third Sector Promotion Markel

Numerous dangers are involved if you fail to comply with local commissioning practices, warns Mike Richardson, claims manager at Markel

Commissioning and procurement
Commissioning and procurement

This is a sponsored feature supplied by Markel

Recent legislative changes, including the Localism Act and the Community Right to Challenge, have led to increased opportunities for charities and community groups to get involved with the commissioning and procurement of local services. These contracts can offer new ways for your charity to benefit the community, but they can also present new risks.

Financial risks

Numerous dangers are involved if you don't comply with local commissioning practices. One of the main risks associated with commissioning and procurement is financial instability: not staying up to date with commissioning processes could lead to reduced referrals and exclusion from future tenders.

This can result in less revenue and failure to meet financial commitments.

To ensure the best chance of winning a tender, include evidence that shows your charity is delivering a positive outcome for its service users. Amend each application depending on the brief provided. It is essential that recent and relevant case studies or examples of your work are included in your tender.

Regulatory risks

It is a requirement that new regulatory standards are met – and there are now a number of new practices that regulators have deemed compulsory. Failure to meet these can result in the application of sanctions. Details on what providers now expect can be found on the commissioning organisations' websites. To give an example, the Care Quality Commission website says it requires:

- An honest, reliable and trustworthy service

- Appropriately skilled personnel with all qualifications, experience and knowledge

- Evidence of completion of necessary checks outlined in Schedule 3 of the Health and Social Care Act 2008

- Evidence that personnel are registered with the Independent Safeguarding Authority

Ofsted also has recommendations about commissioning on its website. It says that local authorities should:

- Take a front-seat role in creating a shared and collaborative approach to commissioning

- Ensure commissioning is informed by judgements based on evidence

- Make sure full consideration is given to new providers

- Design a proper role for charitable, community and voluntary organisations

- Understand the value in keeping local networks of practitioners and local organisations

Another major regulatory risk is the potential tarnishing of your reputation as a provider. Regulators now name and shame providers who fail to comply with standards by filing inspection reports linked publicly on their websites. This can result in loss of credibility with service users, families and other stakeholders – something you do not want to risk.

Contractual risks

Lastly, you could leave your charity vulnerable by not paying enough attention to the details of a new service contract. Remember that your contract might mean that you are responsible and liable for the acts of predecessors. It is not always the case that you are liable for services or work carried out by others, but any new contract should be closely scrutinised to avoid any nasty surprises. Any detail you are unsure of or do not understand should be double-checked by a legal adviser.

Discuss terms within your expectations; if another party is insisting you take on extra liabilities, you will need to check with your insurer/broker that your insurance covers this. You can find insurance protection to cover most of these kinds of liabilities, although cover might be spread over a few different policies. It is crucial to seek specialist advice from an insurance broker to help you decide how much insurance is needed to protect you against potential claims, while also meeting legal requirements.

Once all of these factors have been taken into consideration, you will be minimising your risks in relation to commissioning and procurement.

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