Commissioning Better Outcomes

Development Grant Applications1st October 2015

Main Points for Discussion

• Value for Money (including Procurement)– What constitutes good value for money?

• Conflicts of Interest– What could these perceived to be for DG applications?

• Development Grant Outcomes– What is a good example of a DG indicator?

• Completing of Feasibility Work– What should we have achieved at the end of the DG

project?

Value for Money

• We expect all costs to reflect the current market value for provision and the level of technical support required for a particular case. We will not accept a flat rate to cover technical support or the extension of an existing contract which excludes competition and, therefore, may increase costs to CBO artificially. We will only fund technical support. You must make a contribution.

Value for Money

• All Development grant applications should seek quotes from at least three technical support providers.

• Value for Money will be reviewed stringently through the assessment process.

• Applicants will be asked to remove or reduce costs which do not meet our criteria.

• Each notional allocation of £50K/100K must be fully justified

Conflicts of InterestWe strongly advise that an expert provider should not advise

both a commissioner and a VCSE delivery organisation.– However we will not insist on this as a condition of CBO

development grant funding.– We are taking this approach because we recognise the potential

for conflicts of interest, however:• The market in expert providers is still relatively small; and,• We recognise that in early stage markets there is often a blurring

of roles and co-development is sometimes required.• CBO aims to improve the skills and confidence of commissioners

with regard to the development of SIBs. We consider that advice on the risks a commissioner faces from such conflicts will give them confidence and is a more effective tool than attempting to control the way in which they choose to procure services.

Conflicts of InterestWe will not allow CBO development funding to pay for activities

by an organisation that may then invest in the resulting proposition, either directly or via a fund they manage. – If an organisation that receives development funding later goes on to invest in the resulting

proposition we will reserve the right to not provide a full funding award and/or seek to claw-back funding.

– We are taking this approach because, our view is that:• There are still risks of actual and/or perceived conflicts of interest - actual risks include

potential for proposals being skewed in the investor interest, the distortion of competition and the potential for subsidising profit-making;

• The rules needed to surround this issue would be hugely complex and potentially unworkable;

• Most SI funds are small, lacking depth to sustain such divisions and transparency; so we would have to apply due diligence on each request and could be seen to be biased towards larger, more established players due to them being better able to meet our requirements;

• Due diligence of such divisions and transparency takes time - the development grant pot could run dry and/or the deadline being reached before requirements are satisfied; and,

• Allowing investors to benefit from development funding potentially opens up many additional calls for funding putting pressure on the budget and/or squeezes out existing, new and more local expert providers.

Completing of Feasibility Work• The purpose of the development grant is to

test out the feasibility of the proposal.• We expect applicants to actively engage with

their cohorts and front line staff to target those most in need, and through largely secondary research to review competing needs.

• At the end of work, you should be in a position to complete a full award application.

Development Grant Outcomes

• Three brief indicators showing how and when you will achieve progress.

• One will include the developing of a SIB or other related model linked to the aim of the project.

• The indicators must take place during the development grant period, with one linked to the mid-point of the grant and, ideally, one linked to the end of the development grant period.

Commissioning Better Outcomes

Full Award Applications1st October 2015

Main Points for Discussion• Social Context

– What is the rationale for your cohort and the application of your model in your chosen locale to this social policy area? How can you demonstrate you have a good research base, referral pathway and beneficiary engagement strategy?

• Metrics– What is the rationale underpinning the outcomes, savings and

interventions you have decided to use? What particular attributes does your proposal have to attract the diverse stakeholders needed internally and externally?

• Project Management– How will you manage your project, an impactful evaluation

and continued stakeholder engagement? Who does what to whom, how, when and why? How does the money flow? How will you plan for the future including timelines?

Social Context

• Why is a SIB/PbR the best approach to deliver this project - what other options have you considered?

• What is the evidence from research/ previous work and relevant local data is there that a SIB can achieve the success in this area with this cohort?

• How have you/will you involve and engage with the beneficiaries and front line staff ?

• Is the referral path clear?• Have you checked linkage with Fund strategic

initiatives and other PbR models similar to yours?

Metrics• Is the rationale more than just savings? • Is the primary outcome clear? Are most in need and

VCSE engagement targeted?• Can you access robust data and are there plans for

truly independent verification? Is this costed?• Perverse incentives/attribution risk managed?• Do metrics add up? Are interventions & savings

realistic? Are risk & return balanced?• How will you cover ineligible spend?• Are intervention costs/drop out rates realistic?

Project Management• Have you got a structure chart? Who does what to whom,

when and how and how the money flow?• Who are the intermediaries? How are they to be procured?

When will CBO see draft contracts?• Is every key person in the commissioner on board?• How will you risk manage conflicts of interest? How is risk

transferred from the commissioner? And State Aid risk?• How will you engage with stakeholders including evaluators,

investors, VCSEs, providers, staff and beneficiaries?• How will you add to CBO programme evaluation and

disseminate evaluation in an impactful way?• How will you project manage and learn as a commissioner to

imbed the skills acquired to build more PbRs and SIBs?• Is your proposal timeline realistic and manageable?