1. Category Management and Social Care Steve Robinson Head of Commissioning and Procurement City of Cardiff Council © Commissioning & Procurement (City of Cardiff Council)

2. What I Will Cover In 2010 Cardiff Council took the decision to transform procurement through the adoption of category management. I will: 1.Explain what category management is and how we have implemented it within Cardiff 2.Demonstrate how we have applied it across the Adult Social Care Category 3.Set out how we have used Dynamic Purchasing Systems in Social Care © Commissioning & Procurement (City of Cardiff Council)

3. 3 About Cardiff Council Unitary authority since 1996 – delivering services to 346,000 residents Diverse range of statutory and discretionary services including – Highways and Waste Management – Adult and Children’s Social Care – Social Housing – Leisure Centres and Parks © Commissioning & Procurement (City of Cardiff Council)

4. Where We Were Key Issues Significant level of spend awarded directly with no competition High-level of tactical buying – one-off, ad hoc tenders Devolved buying with limited aggregation of organisation wide spend Result Spend highly fragmented with an excessive number of suppliers and contractors in every category The Council failing to maximise benefits from economies of scale In 2009/10 external spend was £328 million –Goods - £46 million –Services - £219 million –Works - £63 million 9,800 suppliers / contractors 136,000 purchase orders 360,000 invoices © Commissioning & Procurement (City of Cardiff Council)

5. Ongoing Challenges Facing Cardiff Increasing demand and expectation - citizen-focused services Need to become more efficient and effective Focus on what we buy – goods, services and works – Deliver improved value and cashable savings – Reduce overall spend – Improving efficiency of sourcing, ordering and paying – Make sure we are buying the right things Continuing financial pressures. In 2010 Cardiff needed to deliver c.£89m savings over the next 3 financial years On-going pressures - £120 million savings required over 3 years 2016/17 to 2018/19 Savings accepted – 2012/13 £14.38 m – 2013/14 £22.39 m – 2014/15 £48.64 m – 2015/16 £35.96 m © Commissioning & Procurement (City of Cardiff Council)

6. What We Have Achieved Commissioning and Procurement Strategy 2011-15 set out an ambitious aim to transform procurement in Cardiff through the introduction of Category Management – Established a new Commissioning and Procurement service aligned to our Spend Category Hierarchy – Developed and implemented a Category Management methodology (developed with University of South Wales) – Delivered savings of £18m over four years and increased spend under management from less than 50% to more than 90% – Procurement Fitness Check rated Cardiff as ‘Developing to Advanced’ and ‘Advanced’ in terms of Procurement Leadership, Strategy and Performance’ © Commissioning & Procurement (City of Cardiff Council)

7. Category Management and Strategic Sourcing Category Management and Strategic Sourcing are the key drivers for creating value and delivering savings Category Management – A strategic approach to managing all aspects of the procurement cycle – It is a structured way of organising and managing procurement activities and resources by grouping together related products and services across the Council and mapping them to their relevant supply market Strategic Sourcing – Process for challenging what we buy and how we buy it to ensure that buying power and value are maximised – Uses cross-functional teams to develop and deliver category specific sourcing strategies based on an understanding of business needs and market analysis © Commissioning & Procurement (City of Cardiff Council) Demand Side LeversSupply Side Levers Buy less or eliminate spendAggregate or Bundle Spend Standardise or change specificationChange Nature of Supplier Relationship SubstitutionUnderstand Total Acquisition Cost

8. Category Management Approaches Tactical Sourcing Extract benefits Price focused, quick wins, rationalise spend Price Down Strategic Sourcing Sustain Cost reduced, drive value, innovation and performance Cost Down Transformational Sourcing Extend & develop Change way business operates, driving efficiency Cost Out Transactional Performance Improvement Collaborative © Commissioning & Procurement (City of Cardiff Council)

9. Adopting Category Management Full external spend categorisation and analysis Senior level commitment and sponsorship – Established target to deliver £18m over four years – Directorate ownership of savings targets Structured category planning and strategy development and implementation process New organisational structure aligned to spend categories – Understanding business requirements and market opportunities Developing skills and capability – Behavioural and Technical competence Cross-functional working – Key users and corporate resources – Need to ensure ownership and buy-in © Commissioning & Procurement (City of Cardiff Council)

10. Spend by Category Group 2013/14 © Commissioning & Procurement (City of Cardiff Council)

11. Category Management Methodology Identify opportunities to deliver improved value Develop category sourcing strategy Deliver strategy (typically via tender) Category Plan Sourcing Strategy Procurement Plan Manage contract and delivery and performance Contract Management Plan © Commissioning & Procurement (City of Cardiff Council)

12. Adult Social Care

13. Adult Social Care Category Team – Category Manager and Senior Category Specialist – Responsible for delivering value from £93m of spend The team is highly valued by our Health and Social Care Directorate – Director of H&SC nominated team for Welsh Procurement Awards Work in partnership to identify, prioritise, plan and deliver opportunities Directorate ultimately retain ownership and responsibility for delivering Team able to bring analytical and commercial skills together with knowledge of market and best practice Good reliable data is key to effective category planning © Commissioning & Procurement (City of Cardiff Council)

14. Key Numbers 2013/14 Adult Social Care Category Plan Externally Commissioned Services Domiciliary Care Residential Care Nursing Care Supported Living Day Care Extra Care Supporting People Direct Payment - individuals Spend £’00019,50320,89111,58015,6261,9481,29315,4914,707 No of Suppliers91165101923334 Spend (£’000) Top 10 Suppliers 11,4725,8507,71015,6261,9191,29310,578 Suppliers Pareto (80% of spend with how many suppliers) 212158581543214 Category by Service Analysis (£’000) Learning Disabilities 2,5017,84653115,4711,652 0369 Older Persons10,9485,7347,5671,1838 1,818 MHSOP1,1912,6201,97401650295 Mental Health1,1312,9635520240147 Physical Disability2,535560849110961102,077 Alcohol & Drugs155702190-00

15. Prioritised Opportunities CategoryValue (PA)Opportunity Domiciliary Care (OP, MHSOP, PD) £15mReplacement of existing framework agreement Domiciliary Care (LD, MH, AD) £5mImprove management of spot contract arrangements Residential and Nursing Placements (OP, MHSOP) £17.9mImprove openness and transparency of placements through e-sourcing Mental Health Floating Support £0.65mHousing solutions and move on for people with Mental Health problems Drug and Alcohol£0.2mAlternative support and accommodation solution for homeless individuals who have been assessed as having complex needs Supported Living Services (LD) £15.5mRetender of existing block contracts TOTAL£54.25m © Commissioning & Procurement (City of Cardiff Council)

16. Health & Social Care Domiciliary Care Approved Provider List Project © Commissioning & Procurement (City of Cardiff Council)

17. Approach to Sourcing - Demand What are the current arrangements for managing demand and supply? Demand – This section examines the current demand in this category The Council currently buys circa 35,000 hours of domiciliary care for on average 2,500 service users from the independent sector through a framework arrangement and spot contracts. The demand for personal domiciliary care has increased by 8% due to an ageing population, together with an increase in supporting independence enabling service users to remain in their own homes longer delaying the move to residential or nursing care. The table below provides a breakdown of the number of domiciliary care hours per week, per client group and contract type as at 31 st March 2014. Demand on the service is controlled through the Assessment and Care Management process. All care packages, regardless of whether it is via framework agreement or spot contract should be placed via the in- house Brokerage Team based on the number of hours and timings agreed within the service users Care and Support Plan. Contract TypeOPPDMHSOPLDMHSUBTotal Framework1449629451344---18785 Spot270920485706778436611516586 Total17205499319146778436611535371 © Commissioning & Procurement (City of Cardiff Council)

18. Requirement RegulatoryFlexible model to support future WG legislation re citizen directed support Assurance of Supply Encourage a diverse range of providers to ensure sufficient suitable capacity within the market Incentivise providers to develop specialist service where these are needed Encourage providers to improve the terms and conditions of the workforce QualityImprove visibility of the quality of individual care packages and provider performance Incentivise providers to continue to provide quality service ServiceReduction in the administrative burden of tendering, awarding and managing care packages Improve contract management arrangements CostIncentivise providers to be competitive and offer sustainable value for money hourly rates Greater visibility and control over cost Supports a reduction in the total cost of service InnovationMove from measuring performance on a time and task basis to focusing on delivering support which meets the needs and desired outcomes of service users Electronic B2B Integration Business Requirements What are the key requirements for this category ? Using the RAQSCI model helps you to structure the definition of the business requirements in a way that reflects the overall needs and wants of the entire business for this category. The table below provides a summary of the key ‘wants’ that will be used as the criteria to evaluate the strategic sourcing options that will be developed later It should be noted that these requirements have been informed by the Fairer Deal Taskforce Report and subsequent Scrutiny and Cabinet meetings and reports.

19. Strategic Options What options are there for sourcing in this category? The options arising from the option generation workshop should be summarised here Option 1 As-Is Spot Contracts Arrangement Option 2 New Framework Arrangement for all client groups Option 3 – Recommended Dynamic Purchasing System Arrangement (DPS) This option would mean continuing with the existing arrangements for awarding and managing spot contracts via an approved provider list. This option would require us to undertake a competitive tender for all client groups which would result in a appointment of a limited number of providers by locality and with fixed hourly rates. This option takes elements from both Option 1 and 2. It would result in creation of an Approved Provider List but would use technology to run an open and transparent tender and award process for all care packages. Summary The Fairer Deal Taskforce report and subsequent CASSC and Cabinet reports and meetings have had a key influence on the consideration of options. It was apparent that there is no appetite to undertake a retender through a competitive tender process for a new framework. A review of current framework arrangements and previous spot contract arrangements reveals a number of issues which need to be addressed with either model. Research has identified model used by Birmingham City Council which could give us the flexibility of spots with the structure and discipline of a framework. This model is similar to spot contract arrangements but with a more formal and transparent process for award and management of care packages and providers. This is our recommended option. © Commissioning & Procurement (City of Cardiff Council)

21. Matrix DPS Worked closely with CASSC scrutiny to get their buy-in and support for model Model was approved by Cabinet in September 2014 Although considered alternatives decided to appoint Matrix given the ability to manage initial appointment and subsequent transactions Existing providers retained care packages to maintain continuity of care Went live in November 2014 © Commissioning & Procurement (City of Cardiff Council)

22. The Story So Far 52 enrolled providers – 2 existing providers decided to exit Cardiff market – 18 new providers have joined Cardiff market 3500 existing packages loaded on Matrix-SCM 430 requirements released – 1275 offers submitted by providers – 70% received more than 1 offer 393 service agreements created Hourly rates are consistent with previous average Some challenges – Providers have struggled with administration requirements and working with Matrix to deliver improvements – Also needs Council to keep on top of adjustments to care packages Recent negative press about use of e-sourcing or DPS solutions for social care In Cardiff quality is a key aspect of our award criteria and we have been working with providers to develop a Provider Quality Score (PQS) © Commissioning & Procurement (City of Cardiff Council)

23. Overall Evaluation Criteria and Weightings CriteriaCriteria Weighting Sub-CriteriaSub-Criteria Weighting Price50 These criteria will be used to short-list top 5 providers Quality50Attributes15 Provider Quality Score25 Outcomes10 This criteria will only be evaluated for the top 5 providers Care Package issued through Matrix to accredited providers Providers respond with Price, Attributes Response and Outcomes Method Statement Top Five Providers shortlisted based on Price, Attributes Response and Provider Quality Score Outcomes Method Statement evaluated and score appended to original shortlist score Care package offered to ranked number one provider © Commissioning & Procurement (City of Cardiff Council)

24. Provider Quality Score Summary ElementSourceNotes Provider Self- Assessment Quality Score (PSAQS) Provider Self- Assessment Questionnaire A standard set of objective questions completed on a Quarterly (every 3 months) basis by provider This provides the baseline provider quality score Questions based on National Outcomes framework Service User Feedback Service User Questionnaire Completed at case reviews and via postal survey on a rolling programme Points will be deducted on a quarterly basis from the PSAQS Contract Management Issues Issues LogIssues highlighted during Contract Monitoring activity or reported by case managers, CSSIW, service users or family Issues logged and investigated by Contract and Service Development Team The points deduction will be recalculated on a monthly basis © Commissioning & Procurement (City of Cardiff Council)

25. Timeline for Evaluation Methodology Implementation Nov 14 Go Live Evaluation and Award based on Price Attributes Outcomes Dec 14Feb 15Jan 15Mar 15 Apr 15 Issue Pilot Self- Assessment Questionnaire Providers return self- assessment questionnaire Questionnaire analysed Analyse service user feedback and contract management issues Issue Live Self- Assessment Questionnaire For Q4 2014/15 Providers return Live self- assessment questionnaire no later than 15/4/2015 Calculate PQS and load into Sproc.net Go Live with PQS 1/5/2015 May 15 Issue pilot PQS results and scores to providers © Commissioning & Procurement (City of Cardiff Council)

26. Going Forward Implement Provider Quality Score in May 2015 Six month review of arrangements Work with providers and Matrix to refine solution Constructive open dialogue with market about future direction in particular reduction in demand © Commissioning & Procurement (City of Cardiff Council)

27. Health & Social Care Residential & Nursing Brokerage Project © Commissioning & Procurement (City of Cardiff Council)

28. Vision Provide Service User’s and their families’ greater choice To standardise existing process to create greater control and visibility for placements of Residential and Nursing packages for Older People/ MHSOP Meet identified savings target of circa £500,000 for 14/15 Increase transparency, visibility & fairness amongst marketplace Embrace new technology to perform role of sourcing © Commissioning & Procurement (City of Cardiff Council)

29. Existing Process Recognition that the existing process was outdated, unfair to providers and offered Service User’s limited choice Need for process to be more efficient allowing ability to arrange appropriate care faster from accredited providers Case Managers were required to spend several hours phoning accredited providers to find suitable available care Managers were required to negotiate placement fees with homes with no knowledge over what presented 'best value' © Commissioning & Procurement (City of Cardiff Council)

30. Development & Design Close engagement with Directorate undertaken to outline new approach and highlight benefits Utilised technology available through our e-Sourcing system, PROACTIS, creating standard sourcing templates and scheduled tasks Engagement with marketplace to consult & agree final process prior to go-live via ‘Meet the Buyer’ events Training & detailed work instructions developed to support new process for Buyers & Suppliers © Commissioning & Procurement (City of Cardiff Council)

31. New Process Invitations sent to all accredited providers to create Dynamic Approved Provider List (DAPL) Private placement opportunity issued via PROACTIS to all accredited providers on DAPL detailing needs of Service User Providers given 48 hours to respond to electronic placement opportunity and provide a price per week Following the 48 hours Case Manager liaises with Service User and/or family to choose home Finally the contract is issued to the chosen care provider whilst interested homes notified of the outcome via PROACTIS © Commissioning & Procurement (City of Cardiff Council)

32. The Story So Far The below is for the period of Sep 1 st 2014 – March 1 st 2015 : No of Accredited homes registered on PROACTIS DAPL: 66 (Residential) 37 (Nursing) No of opportunities issued to market: 427* No of opportunities successfully secured via PROACTIS: 177 2014/15 Savings** achieved = £231,633 Full Year Savings** achieved = £672,963 * Includes duplicate & withdrawn opportunities issued to marketplace **Savings calculated by comparing average of bids received vs. lowest bid (CCC Contribution) and are to be confirmed by finance. © Commissioning & Procurement (City of Cardiff Council)

33. Additional Benefits Greater efficiency, visibility and fairness in how contracts are sourced and awarded Ability to arrange appropriate care faster from accredited providers Major time savings for staff, thanks to tools, templates and repeatable processes Reduce administration burden for social workers / case managers, typically saving up to 2 hours per case. Greater transparency and choice for care users and their families - in terms of where they are placed, the fees and how decisions are made © Commissioning & Procurement (City of Cardiff Council)

34. Any questions? Steve Robinson: s.robinson@cardiff.gov.uks.robinson@cardiff.gov.uk Sam Harry: sharry@cardiff.gov.uksharry@cardiff.gov.uk © Commissioning & Procurement (City of Cardiff Council)