Councils tendering care contracts in online ‘auctions’

Topics covered: Ridouts professional advice

According to the Guardian, councils are putting care packages for vulnerable people out to tender in ‘eBay-style timed auctions’.

It is common for local authorities to tender for block contracts with care providers but in a new development councils are now searching for the most competitive bid to support elderly, disabled, ill or dying people on a case-by-case basis.

The new software system designed by Matrix SCM, called SProc.Net, allows councils to circulate a care package they require for an individual to a large number of suppliers who then bid in an online auction for the contract.

Birmingham and Southend councils have adopted the system, and around 30 other councils are due to start using it soon. Birmingham city council has been using the system to support people in their own homes since September 2012 and last December it began using the system for residential care packages. According to the council, it has reduced its spending on care by almost a fifth using this system.

Under the system, the bidding can be time-limited to a few hours or it can last for two or three days. During the bidding time up to 100 providers might bid. The software produces a shortlist of the most favourable bids. The shortlisted bidders are then told where they are ranked in the process. If they discover they are in second position, they can adjust their bid, for example by lowering the price or offering extra care services so that they can move up to first.

A Matrix spokesman said those receiving the care packages would probably not know that they had been the subject of a bidding process by different care suppliers and that: “Matrix SCM is becoming the Amazon of procurement. This system can ease the process and improve the quality.”

Les Latchman, chair of the Birmingham Care Consortium, said: “I believe this system increases the risk to people who are being looked after. They are treated like cattle. Care is bought in the same way that people buy toilet paper. The system works well when it comes to saving money but fails miserably when it comes to providing quality and safe services.”

John Lister, of the campaign group Health Emergency, condemned the system saying: “Local authority care budgets have already been slashed to the bone, there’s nothing left to cut. This system is, it’s a race to the bottom.”

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