Civil servants must improve contract negotiation skills

31 August 2012

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31 August 2012 | Anna Reynolds

Many civil servants in central government do not have the commercial skills to negotiate effective contracts to achieve the government’s aim to open up public services to greater choice and competition.

A report, Commissioning for Success published today by the Institute for Government (IfG) revealed when commissioning services, government often might have two separate deals that have the same or related outcomes and suppliers often feel they should be paid more for what they achieve.

The IfG held a series of workshops with around 80 senior civil servants, commissioners, regulators and providers across all sectors. Feedback showed commissioners focused too much on securing a good price on individual contracts, at the expense of developing a diverse market of suppliers that can effectively meet the needs of users in the long term.

Tom Gash, joint author of the report told SM: “The inability to target an individual’s needs has been an age-old problem within the public sector. By coordinating contracts we can tie two services together in one contract.

“This can already be seen through the Ministry of Justice and Department for Work and Pensions who are attempting to pay for reoffending and employment outcomes through the same contract.”

There was overall agreement that new ‘payment by results’ (PbR) models demanded more from commercial and analytical staff, including better knowledge of financial markets and the factors which encourage investment in companies delivering PbR contracts.

The report recommended government departments delivering public services through contractual mechanisms should provide Parliament and the public with accountability maps, which should give a clear account of which organisations are responsible for which aspects of system management.

The government should also assign responsibility and budgets to specific ministers to take a more coordinated approach regarding contracts.

It added ‘safe spaces’, designated times and forums, should be provided to enable commissioners, regulators and providers to engage in frank discussion about the challenges of implementing choice and competition in public services effectively.

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