This page is part of our successful commissioning toolkit.

You need to establish at an early stage that you and your organisation have the ability to undertake the activities of the commissioning process you are contemplating. This falls into three parts – legal powers; money; and authority:

(also known as ‘vires’)

There may be power in legislation that permits your organisation to carry out the action you envisage. Legislation may be in various forms. For example, statutes or Acts of parliament are primary sources of legislation; statutory instruments and Secretary of State directions are secondary sources of legislation; there may also be requirements to have regard to certain guidance. It is important to ensure that you are acting within your legal powers when making any decision or taking action.

If the legislation requires you to carry out the action then this is called a ‘duty’. Your organisation must not act beyond its powers, that is, act ‘ultra vires’. On the other hand, if you are under a duty to act in certain circumstances set out in legislation, then you must act to some extent but ensure any action you take is legal.

For example, your council may have a power to remove graffiti. But you need to consider issues such as whether that power extends to removing graffiti in private places? Or does it further extend to financing a third sector organisation (TSO) to remove graffiti in a private place? Even if such actions are within your powers, removing graffiti in a way that damages private property might constitute criminal damage and be illegal.

It is important to check that you have the legal powers you require and are acting within those powers. If you are unsure whether the power you seek exists in a particular case, consult your organisation’s legal manager. (If the answer is that the desired power does not exist, you will need to develop a different plan for achieving your goals within existing legislation).

Practical example 1: Legal powers

A county council and its contiguous Primary Care Trust (PCT) see benefits in closer cooperation in the commissioning of health and social care services in their area. Integrating the commissioning of primary care with the commissioning of social care and linking these to the delivery of other council services will bring benefits to patients and service users.

Section 75 of the Health Act 2006 allow the NHS and local authorities to:

  • Pool budgets for specific services, with contributions to the ‘pool’ losing their original identity;
  • Delegate commissioning to a single lead organisation;
  • Integrate health and social service staff into a single organisation.

The council and trust decide to integrate staff into a single organisation since this is considered to give more scope for services to be delivered efficiently and effectively.

Practical example 2: Legal powers

A government department is given the job of setting up a programme to pay employers to hold onto people they would otherwise make redundant. It may be their hours will reduce from full-time to part-time. But the idea is it will keep them in touch with work.

The department has never run such a programme and cannot find in its own legislation a power to do so. For a time, it seems the programme will have to await new legislation. However, the lawyer in the department decides to check whether any other department has a power that would suffice. She writes round a number of departments and one replies that it has a suitable power. This power refers to the secretary of state (in general) and not to any particular secretary of state. That means the first department can run its programme under this power.

The Department of Health has provided an outline of the legal powers available to the NHS to make grants.  The outline is only a summary of the powers available and, if you are planning to use them for the first time, you should seek legal advice.


Across the public sector, there are established procedures for allocating budgets. These vary a little between parts of the public sector. But the following elements of the allocation are common:

  • A budget is allocated to an objective (or activity);
  • The budget may be made up of separate ‘blocks’ of money intended for different types of spending.  These usually distinguish between:
  • capital expenditure, for example on land, buildings and major equipment, which leads to the acquisition of a real asset; and
  • current expenditure, for example on rent, wages and other expenses.

You need to check that your budget contains the right amount of money for the activities you envisage and also that it is in the right blocks. If it is not, or if you are unsure, speak to your organisation’s finance department.


Your organisation will have a framework for delegating authority to make decisions – including financial decisions. You need to check that you have the authority you need to make the decisions you envisage. If you do not, you will need to establish who does have that authority and establish with them a protocol for decision making. For example, will they make all decisions on your behalf, or will they delegate some decision-making authority to you?

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Successful commissioning toolkit: Table of contents

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