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BACKGROUND Over a number of years, large outsourcing deals have increasingly been used in both the private and public sector to deliver complex and often specialised services. While in the majority of cases these solutions have delivered excellent service quality and value for money, this is seldom achieved without careful and proactive management. It is a common misconception that the value negotiated when a contract is put in place will be automatically delivered over its life. Effective SRM is required to ensure that both the contract and the relationship deliver optimum value. Here at SCC we have been able to utilise some of the principles of SRM to enhance our relationship with one of our stra- tegic suppliers, Care UK. In 2002, SCC outsourced seven of its residential care homes to Care UK Community Partnerships following a competitive tender process. The contract duration is for 25 years which means it has an unexpired term of 14 years from 2013. The deal offered guaranteed purchase of both residential and day care places. The contract also includes various property maintenance obligations which ensure the continued upkeep of the seven homes, the freehold of which is still owned by SCC . The current annual value of the contract is circa £7.5m which equates to £105m for the unexpired term. Prior to 2011 the contract was managed, largely informally, by two teams within SCC. The strategic level relationship between SCC and Care UK was always positive but the atten- tion and internal resource focused on the contract by SCC had varied. In any contract of this duration, the environment within which it operates is likely to change. In this case the wider political agenda relating to adult social care prompted questions about whether or not the contract was still meeting customer needs. The choice agenda and the drive to support people to remain at home living independently, had impacted on occupancy of care homes and attendance at day centres, with numbers falling most notably during the last three or four years. This, coupled with the financial difficulties being faced by the public sector, resulted in contracts of this nature being scrutinised more than ever by council members, senior officers and the public. OUR APPROACH It was time to take action; ‘Project Resolve’ was launched in 2011 by the SRM team and Care UK was one of the strategic suppliers selected as a key provider of care services. The SRM team consisted of seven members drawn from Procurement and Commis- sioning, Adults Social Care and Property services. A strategy was developed to gather data relating to the specific contract and SCC’s wider relationship with Care UK, and to undertake the following research: › Establishing current SRM maturity › Benchmarking Care UK bed prices against similar providers in the market › Conducting an evaluation of Care UK’s financial position › Understanding how SCC was perceived as a customer › Analysing SCC’s usage of Care UK bed and day care places › Identifying and fully understanding the key clauses within the contract › Engaging with Care UK to fully understand how they managed the care service and the properties This enabled a series of recommendations to be developed that would address the immediate issues and also provide a template for managing contracts and relationships more effectively in the future.
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