This page is part of our successful commissioning toolkit.


A council wishes to commission support for vulnerable families in its area. The population is mixed in both economic and ethnic terms. School attainment varies markedly, as do ‘longer-term’ indicators, such as rising obesity and behavioural problems.

Stakeholder engagement and communications

A policy manager in the council takes the lead on this programme. Studying the available research she quickly realises that engagement with families and communities – and their advocacy groups – will be vital. It will also be necessary to cover fully the range of income and ethnicity.

She therefore holds an initial, scoping meeting with stakeholders, which points to some potential outcome measures for the programme. It also suggests local parenting groups would be good providers. While it is also clear that there are many of these, some lack significant capacity.

The policy manager agrees to consider these issues.


The policy manager meets her colleagues in the council’s legal office and finance department. She explains that she is minded to offer grants to third sector organisations (TSOs) to deliver the programme.

The legal officer confirms that the council has a power to give such a grant. The finance manager confirms that there is a suitable budget but he is concerned that simply ‘handing out’ grants will not produce the kind of efficiency that is required in this age of ‘more for less’.

Agree outcomes

The policy manager invites internal and external stakeholders to a workshop to determine the programme’s outcomes. She ensures the focus of the workshop is very much on families’ needs. Much of the evidence comes from research by the children and families department in the council and by local TSOs that work with families.

The workshop agrees a draft set of outcomes, and sets these in SMART terms.

The policy manager discusses the proposed outcomes with colleagues in the children and families department. They agree that the outcomes should be integrated into the council’s Every Child Matters framework. This will promote synergy and reduce bureaucracy.

Choose grant and/or procurement

The policy officer now works closely with a procurement officer. Reviewing the evidence already gathered (see above), they agree that the provider market for this programme is dominated by a number of local TSOs. Some of these have little capacity, some have strong affiliation with particular areas and/or ethnic groups.

On the basis of this, they decide they would like to hold a competitive grant process. They establish that this will not break European Union (EU) State Aid rules (essentially, because it would not distort EU trade).

Pooling money

Although the council has previously decided (see above) to integrate this programme’s outcomes into wider Every Child Matters outcomes, it is agreed not to integrate the budget for the programme. This is because councillors and policy managers wish to retain the particular focus of the programme, at least for now.


The council is seeking efficiency in this programme from three sources. First, there is great clarity as to its outcome. This will mean money is well directed at the chosen target. Second it has been agreed (see above) that there will be a competition for the grants. All other things being equal, competition promotes value for money. Third, it is known that some of the potential providers lack capacity. The level and length of funding available will give organisations an opportunity to develop their capacity and become more efficient.

Risk management

The council team and a small group of close stakeholders identify four risks in the programme. First, the providers will not make enough progress towards the outcomes because the problems in parenting are related to long-term economic, social and cultural problems. This will lead to, second, spending without desired impact. Third, the council will gain a reputation as part of the “nanny state”. The council decides to manage the first through rigorous performance management, and the third through ongoing involvement of stakeholders (especially those closest to the communities).

Fourth, there is a theoretical risk that an organisation that has not been awarded a grant under this programme may complain about unfairness of treatment. The council is satisfied that this risk is minimal because it used a tried and tested grant making process that is fair, open and reasonable and is compliant with the Compact.


The council and stakeholders recognise that this programme involves long-term behavioural change. The council therefore agrees to three-year funding.

Sustainable financing

The key issue here for the TSOs is full cost recovery. If the council did not pay the full cost, but only the ‘project cost’, the financial viability of the TSOs would be at risk.

However, in this case, in constructing their bids for the grant, the TSOs have worked closely with the local Council for Voluntary Service. As part of this each TSO has worked out the proportion of management cost that should be apportioned to the programme. In this way, full cost recovery has been built into the bids and can be discussed openly with the council.

Payment model

It is clear from the bids that the TSOs will not be able to deliver the programme without money up-front for items such as premises and staff recruitment. The council therefore agrees a payment model that includes this up-front expenditure, as well as payment in advance for the planned expenditure by each of the anticipated milestones (which are steps towards outcomes). Actual expenditure will be regularly reconciled against planned expenditure and adjustments made.  This may involve additional payments or the recovery or netting off of any payments made in advance of need.


Monitoring will be based on the clear outcomes already established, plus necessary financial data. Taking the outcomes first, an issue for monitoring is that it is expected that the outcomes will be achieved only some way into the future. The council and stakeholders therefore agree two approaches. First, they agree a limited set of milestones, which are steps towards outcomes. In the short-term, it will be the achievement of these milestones that will be measured (in place of outcomes).

Second, they learn from the research on this policy area that a lot of the impact depends on the satisfaction of parents, children, and home visitors. These will therefore be measured.

Turning now to the financial data, three sorts are required. First is the upfront expenditure for premises, staff etc already agreed. Second is planned expenditure by the anticipated milestones which will be used to make regular advance payments. Third is the actual expenditure when milestones are reached which will be used to reconcile against the planned expenditure. The aim here is to pay the TSO for its performance, ensure it remains liquid, and recover or net off any funds paid in excess of need.


The council decides to evaluate the programme. It recognises the complexity and sensitivity of the interventions in family life involved, and the problem of taking into account external factors which fall outside the control of the programme (such as national economic performance). It therefore decides to commission an evaluation with both summative and formative elements. The summative element will rest strongly on the outcomes that have been clearly drawn up for the programme. The formative evaluators will work closely with the TSO providers and families.

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