The government plans to improve services by making trusts better commissioners. Helen Mooney explains how a framework to help PCTs access skills in commissioning from the private sector should help them ultimately deliver better fitting services to communities

Cast your minds back to the summer of 2005. It may seem a long time ago but that was the summer that an awful lot was about to change for the NHS and primary care trusts in particular - at least in theory.

Less than a week after parliament had risen for its summer recess and everyone was packing up and shipping themselves off for a well-earned break in the sun, the Department of Health published its by now notorious document Commissioning a Patient-led NHS. The document will go down in history for the proposals it contained - not least that PCTs should break off their provider arms and concentrate solely on commissioning.

At the time, the document caused massive shock waves throughout the NHS and was subsequently watered down - but many key elements remain. Ultimately, PCTs were charged with 'effective commissioning' that made choice 'real' for patients.

It was not until a year later, in a somewhat messy invitation from the DoH to the private sector to tender a bid to be added to the catchily titled Framework for procuring External Support for Commissioners, that the FESC train really got going. However, the commissioning framework had already started the process.

Paragraph 23 of Commissioning a Patient-led NHS explains that PCT functions can be 'provided by external agencies, partners and consortia working on their behalf'.

What is the driving force behind FESC and why is it needed? Put simply, the government, under former prime minister Tony Blair's premiership, came to the conclusion that, on their own, many PCTs simply did not have the capability at all levels to carry out the entire commissioning job on their own. The PCT reorganisation started by the DoH's commissioning document was an attempt to introduce that expertise and, as PCTs became bigger, the DoH hoped that their effectiveness at commissioning would also grow.

The government also conceded that some of the expertise in commissioning that it envisaged PCTs having in order for payment by results and the foundation trust model to work effectively did not exist in the NHS. Therefore, it concluded, that type of commissioning capability was best brought in from the outside, from private sector companies that could do it better than the NHS could.

As Ian Dodge, director of the DoH's policy support unit - part of the policy and strategy directorate - told an Institute for Public Policy Research seminar in June 'commissioning is still weak in many PCTs'. He explained that this was partly due to a 'lack of clarity' as to what was meant by commissioning.

'There needs to be much better assessment of the needs and about the quality of current services and adding value,' he said. 'There are innovative models developed in the independent sector which quantify population health and changes over time. These haven't been developed in PCTs and they [PCTs] don't have the necessary models for analysis'.

Mr Dodge said that, although there was potential to introduce effective changes in commissioning, such change would require the 'development of modelling techniques and stronger analytical functions' in PCTs.

Mr Dodge's speech reveals much about the DoH's thinking on commissioning and FESC. The government is keen that the independent sector should be involved in commissioning. As Mr Dodge concluded: 'PCTs should be free to seek support rather than think they should grow their own expertise. They need to look at other agents such as the private sector to provide expertise.'

The DoH has now chosen and added to the framework 14 private companies it believes can help provide this commissioning expertise. It hopes that PCTs who have identified gaps in their commissioning skills will now decide to approach the private sector to provide that expertise (see below).

The skills that PCTs will be required to have either internally or procured through the private sector include, for example, being able to carry out the analysis of population risk assessment, data harvesting and analysis, social marketing, professional feedback, opinion surveys, service evaluation and redesign, and procurement and performance management.

Launching FESC at the start of October, health minister Ivan Lewis said that it was designed to 'allow PCTs to benefit from a bank of knowledge already built up through the DoH procurement process'. He said that PCTs would be able to work with organisations that are 'already known and trusted' to free up PCTs to 'concentrate their efforts and expertise on providing patient care'.

Mr Lewis added that it would be the decision of PCTs whether to use the FESC suppliers and said that, should they choose to do so, they would 'remain fully responsible and accountable for managing the services provided'.

So which part of the commissioning process will PCTs be able to ask private companies to help them with?

FESC sets out three ways in which the private sector can be used and three lists to which the private companies can be added: micro; function macro; service macro; and any combination of the three. These are then each split into four commissioning areas: assessment and planning; contracting and procurement; performance management, settlement, and review; and patient and public involvement.

According to the DoH's FESC team - part of the department's commercial directorate - PCTs will be able to approach: companies on the micro list to provide a single commissioning service area; companies on the 'function macro' list for 'all commissioning activity relating to a commissioning function across all service sectors'; and those on the 'service macro' list for all commissioning activities across all commissioning functions for a single service area (see box). It will be left up to PCT boards to decide which option or combination of options they want to use to achieve effective commissioning.

According to an explanatory outline document by the DoH FESC team: 'FESC enables commissioners to secure support from pre-qualified independent sector organisations that have been evaluated on their ability to support the commissioning needs of local systems'. The framework and the work that these companies will provide is based on a matrix of commissioning functions and service areas, designed to enable PCTs to procure external support to meet their local requirements from a pre-qualified list of suppliers.

The FESC team document continues: 'Part of the purpose of the FESC is to allow for development and sharing of skills across organisations, particularly where independent sector partners have worked in different parts of the NHS and in other healthcare systems'.

To enable trusts to decide whether to use FESC, the DoH will provide PCTs with a self-assessment tool. The PCT will be able to use the tool - which is based on a commissioning matrix - as a basis for discussing and deciding on their organisation's skills gaps and their need to procure from the private sector. The tool will ask PCTs to examine four skills areas and assess the need to use the FESC against these.

These include:

  • Engagement - how is the PCT engaging and managing stakeholders?

  • Financial - how is the PCT achieving a sustainable financial position?

  • Learning and growth - how is the PCT sustaining our ability to change and improve our commissioning capabilities?

  • Systems and processes - what commissioning processes should the PCT excel at to satisfy the public and its strategic health authority?

The government and the DoH see FESC in engaging the help of the private sector in commissioning as a tool to help PCTs get better at getting value for money while ensuring the quality of the healthcare services they provide to their local populations. FESC has now become part of a wider package being rolled out by Mark Britnell, the DoH's director general of commissioning and system management.

In August, Mr Britnell announced that he would look to reward PCTs that can demonstrate they are 'world-class commissioners' by giving them foundation trust-style freedoms.

The DoH dispatched a questionnaire asking for ideas on what world-class commissioning - a phrase coined by Mr Britnell - should look like. In a letter accompanying the questionnaire, DoH commissioning director Gary Belfield said that a central part of the world-class commissioning programme is to introduce 'earned autonomy' for PCTs as a reward for being effective commissioners.

Freedoms for PCTs could include less frequent performance management, greater financial autonomy and the ability to enter joint ventures without DoH approval.

The DoH plans to draw up 10-15 key competencies that PCTs would need to adopt to become world-class commissioners. As organisations, they will also expected to be subject to the risk-based regulation, similar to that imposed by Monitor, the foundation trust regulator, but overseen by SHAs.

At the end of September, the DoH held a world-class commissioning conference at Warwick University which involved around 75 'leading thinkers and practitioners from the NHS and its partner organisations' to flesh out what excellent commissioning should look like and what competencies PCTs should strive for.

Use of FESC will start in Hillingdon PCT this autumn, as it is asking Bupa Commissioning to ensure better data analysis and coding of its commissioned secondary care work. Ahead of being named as one of the government's FESC pilot sites, the PCT entered into negotiations with BUPA Commissioning in September in the hope that the latter will be able to provide it with a small range of commissioning services and skills.

According to Hillingdon PCT's business case, BUPA Commissioning will be asked to analyse and help performance manage the activity data of local acute trusts. It will also be charged with coming up with ways to commission more efficiently and save the PCT money. The PCT hopes to have the contract up and running by 1 November.

The other pilot PCTs aim to start to use FESC and work with the private sector in the new year. The DoH's FESC team hopes to advertise FESC to other PCTs in a series of roadshows which will take place in each of the 10 SHAs, starting in the North West on 2 November. The private companies will be invited to showcase the skills and knowledge they can offer to PCTs. It will also be an opportunity for the NHS to learn more about using the FESC.

According to the FESC team, using the framework will help PCTs undertake their commissioning functions. The DoH says it will help PCTs by:

  • providing easy access to a framework of organisations, offering a range of skills and experience, that have been through a robust pre-qualification process by the DoH;

  • saving time in undertaking procurement activities, with easy access to optimum value-for-money solutions;

  • minimising the range of organisations offering resources, which will reduce the legal and cost implications that can be encountered when seeking to procure external support;

  • adopting more innovative and efficient approaches to commissioning.

The companies on the list will be able to provide a range of skills and expertise to the private sector, whether it is helping to collect and analyse data on acute trust activity, ensuring that the coding is accurate and PCTs are paying for what they actually commission, or helping to negotiate contracts which are better value for money from the acute sector.

Many of the companies involved have healthcare insurance backgrounds and are knowledgeable in data analysis and population risk stratification to a minute level.

The government and PCTs alike hope that these companies will be able to quickly inject some of the much-needed expertise and advice in commissioning that PCTs want.

One thing they will not be allowed to do however, is take over the running of PCTs in their entirety. Although initially mooted by the DoH and contained in the initial tender notification, the idea of end-to-end commissioning has been shelved, at least for the time being. As Mr Dodge warned: 'There need to be limits to private-sector involvement, because PCTs are public bodies and require legitimacy and accountability. This is partly why you won't see end-to-end commissioning undertaken by external consortia.'

If Mr Britnell's vision of world-class commissioning is to take shape, PCTs may well be forced to use a magnifying glass to look at they what they do well and what they do badly. Most will have to concede that they do not have all the skills and expertise needed to become world-class commissioner single-handedly and, when they do, the private sector will be waiting to work with them.

Who's in FESC?

The 14 companies on the Framework for procuring External Support for Commissioners

  • Aetna Health Services

  • AXA PPP Healthcare Administration Services

  • BUPA Membership Commissioning

  • CHKS, trading as Partners In Commissioning

  • Dr Foster Intelligence

  • Health Dialog Services

  • Humana Europe

  • KPMG

  • McKesson Information Solutions

  • McKinsey & Company

  • Navigant Consulting

  • Tribal Consulting

  • UnitedHealth Europe

  • WG Consulting Healthcare