We now know what the short-term holds for public procurement at the end of the Brexit transitional period.
It is, therefore, important to understand your negotiating position as fully as possible when entering into a dialogue with a local authority or health body. The following may seem obvious points, but it is worth thinking them through:
- Historic relationship with the commissioner – the past relationship a provider has with the commissioner often influences decisions; both at a strategic level and in terms of personal contacts within the commissioning team.
- Resources – the resources available to the commissioner and the priority it places on the services in question within its overall budget will undoubtedly have a bearing on its appetite and ability to review pricing arrangements. Financial resources do NOT excuse a commissioner from meeting its statutory duties but will impact on how flexible it is able to be.
- Leverage – the more distinctive the services you deliver and the more these are valued by your client base, the more leverage you will usually have. More generic services will tend to be easier for the commissioner to source elsewhere.
- Competitors – another factor (albeit one that is outside of your control) is the degree to which other providers in the area are willing and able to accept lower fee rates. This is, however, a dangerous area as commissioners may suggest that they have providers on, for example, framework agreements, willing to take on work on very low rates, when in actuality they have only one such supplier and which in practical terms could not cover demand.
- Actual costs – before entering into any discussions with the commissioner, you need to have a comprehensive evidence base to demonstrate what your actual costs are. This makes it easier to justify a request to renegotiate fee levels and to show that you are acting reasonably.
- Overarching considerations – there are finally, both your own strategic objectives and commercial thresholds and the commissioner’s agenda to consider. No doubt each organisation will have some “red lines” around what you can financially cover and for how long. Equally an understanding of the commissioner’s motivations and the objectives of Elected Members where they are dealing with local authorities can be extremely useful regarding your positioning.
The traditional dialogue between providers and commissioners in this sector is however increasingly breaking down, and in order to set out your concerns more formally and remind local authorities of the legal duties they are under, we have prepared a template letter for providers to adapt. This addresses contractual rights, legislative obligations under the Care Act 2014 and includes specific arguments in relation to sleep in. The letter is available at the cost of £750 plus VAT and contains detailed drafting notes to enable providers to adapt for individual purposes.
If you would like more information on this or require legal advice on any other contract and commissioning matters, please do not hesitate to contact Matt Wort.
Daniel Brewer from Resonance talks about his journey into investing in enterprise with a social purpose, and discusses what the landscape looks like for social businesses post Covid-19.
On 1 December 2020 the Court of Appeal handed down judgment in Pimlett v Curo Places Limited EWCA Civ 1621 where prior judgments in the First-tier Tribunal and the Upper Tribunal were overturned.
For part 3 in this series of short podcasts, Chris Lloyd-Smith interviews senior associate Madhur Sharma on how she has been coping during these unprecedented times.
On 26 November 2020 further changes to the 'Building Regulations: Fire safety - Approved Document B' will take effect.
Last week, the NHF published its final version of its new Code of Governance and made some important changes from the previous draft that will impact on those housing associations looking to adopt it.
As the end of 2020 beckons, we take a look at what progress the Sterling market has made in its preparations for the end of the London Interbank Offered Rate (LIBOR) on 31 December 2021.
Finally, there is a glimmer of hope that perhaps the Covid-19 pandemic could be reaching its end.
For part 2 in this series of short podcasts, Chris Lloyd-Smith interviews senior associate Lisa Whitehouse on how she has been coping during these unprecedented times.
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