Staffordshire, Stoke and Telford and Wrekin: the Benefits of Joint Tendering and Economies of Scale

Commissioners from Staffordshire, Stoke on Trent and Telford and Wrekin councils worked together to jointly tender for sexual health and HIV services. The move has had a variety of advantages, allowing the three areas to benefit from economies of scale and better partnership working with each other and the provider for the benefit of the patients.

Tendering failures led to re-think

Sexual health services– like much of public health – have had to cope with cuts to their budgets in recent years. But as a demand-led service this is particularly difficult.

Staffordshire County Council, which has seen its sexual health budget cut by 25 per cent in the past six years, saw the consequences of this when it re-tendered its service in 2017. Despite three attempts, it could not get a new contract signed.

Staffordshire Senior Commissioning Manager Lucy Hegarty said: “Nationally all commissioners are facing this challenge. When the tendering process fell apart in 2017 we had to work with our existing provider to put in place a solution to ensure services could continue to be delivered safely and effectively.

“We negotiated based on our minimum service requirements and built it up from there in partnership. It was far from an ideal solution for our large geography, but the service that remained was at a high standard.”

The experience prompted Ms Hegarty to start exploring joint tendering arrangement with neighbouring councils Stoke on Trent and Telford and Wrekin in partnership with the regional NHS England team, which commissions HIV services.

“Collaborating to create a larger geography was a way to widen opportunities for potential providers, allowing for greater economies of scale and greater potential for sharing resources and best practice. It was a chance to get a sustainable, long-term solution in place,” added Ms Hegarty.

The key steps to joint tendering

Staffordshire, as the largest budget holder, took the lead. One of the first challenges was that the contracts across all three areas did not align. Telford and Wrekin extended its provider’s contract by a year so all the sexual health and HIV services ran until March 2022and one set of terms and conditions were agreed to align future contracts for the provider.

Unfortunately, it was not possible to align timescales for the emergency contraception contracts within pharmacies across all three areas, so Staffordshire and Telford and Wrekin had to proceed without Stoke for that one.

The first step taken by the three councils was to carry out a comprehensive needs assessment and customer consultation. This included surveys of current service users alongside workshops with potential future service users.

Alongside this an agreed shared tariff or all core elements of the service was used to compare how much needed to be spent to meet demand in each area. The three areas then used the West Midlands Sexual Health Network standard template as a base to build a shared service specification with the idea that each area could bolt on extras depending on what their individual needs were.

This was done collaboratively, aligning where possible, and with separate requirements for each area only being added on exception and where additional funding had been agreed. This included an enhanced focus on prevention work in Stoke, including support to young pregnant women, and an enhanced oversight and governance of GP LARC (long-acting reversible contraception) services in Staffordshire and Telford and Wrekin.

The contract on offer was also made slightly longer than previously, 3+2+2 years, to provide stability for the provider and an ability to work in partnership with them to develop the service.

Finally, as part of the procurement process, the draft specification was published and sent to providers which had expressed an interest earlier in this tender process. They were also invited to meet with commissioners to discuss any concerns.

Ms Hegarty said: “We wanted to get feedback on our proposals to make sure we were not being unrealistic. There were a few tweaks made, but nothing substantial. It gave us confidence that we would be successful when we put it out for tender.”

‘We’re delighted with the results’

For each of the lots two good bids were received. Inclusion(Midlands Partnership Foundation Trust)was chosen to run the core sexual health and HIV services contact, while Central Health Solutions won the pharmacy contract.

While it was run as one overall tender there are still individual contracts with each council as well as NHS England for the HIV element.

“We were delighted with the results,” said Ms Hegarty.

“To have two viable bids was a great position to be in given the problems we had encountered previously. Now the providers are in place we are seeing real benefits.

“The economies of scale have meant we are doing more on prevention, for example, than we could have ever have achieved on our own. There is a benefit for the provider too - they see it as one overall service so can flex their staff when and where needed across the patch.

“In terms of performance management, our quarterly contract meetings have one performance framework and we alternate between joint and individual meetings across the three councils.

“It means we can speak as one, which I think has more impact. That is also good for the provider – instead of hearing different things they are given a clear message of what may need to be addressed.”

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