This page is part of our successful commissioning toolkit.

Whether making grants or buying services, an effective financial relationship between a public body and a third sector organisation requires careful thought. Some of the things to think about are not financial. So the guidance also embraces related processes such as identifying needs and setting outcomes (which comes before the purely financial part of commissioning) and evaluation (which follows it). Here we consider who is involved in commissioning within public bodies and when they should use this guidance. We also consider the benefits of working with third sector organisations (TSOs) and give some typical examples of how this happens.

You should use this guidance at different points in your relationship with a TSO:

  • Before you establish the financial relationship. In particular, being clear about the outcomes you seek before you go into the financial aspects of the relationship will help to make later steps in commissioning smoother and more productive;
  • During. Commissioning involves maintaining good financial relationships. Issues may arise during the course of even the best financial relationships. Good ‘maintenance’ can help you to spot and deal with small issues before they become major problems;
  • At the end. Good planning, management and communication are important when ending a service while maintaining value for money (see ‘Decommissioning’);
  • After. It is important to learn the lessons of one ‘generation’ of commissioning and apply them to the next. This will bring about continuous improvement. The guidance contains a section on evaluation to help you achieve this.

Our research tells us that a crucial point in the commissioning process is the decision on which funding channel to use: grant, grant-in-aid or procurement.  Our guidance looks at this in detail. We suggest that commissioners should consider this carefully before starting the process of grant making or procurement. You can find out more about this in Grant and Procurement.

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