Checkpoint 3 guidance

Commissioning Support Services:
Checkpoint 3 Guidance
June 2012
Building choice of high quality support for commissioners
Objective of, and Outputs from Checkpoint 3
Checkpoint 3 is the third and final step in the process of assuring CCGs and the NHS Commissioning Board that the
emerging CSSs are fit for hosting and sustainable in the long term.
The primary purpose of Checkpoint 3 is to establish, against four key tests (Leadership, Customer, Business and Delivery),
whether you have made sufficient progress to date to indicate that (with an on-going Development Plan) you are likely to
succeed as viable and independent organisations.
At the heart of Checkpoint 3 are a number of submissions and tests to ensure you are commercially agile enough in this
emerging and fluid market for commissioning support.
Activity this summer is focused upon the BDU being able to make individual hosting recommendations for each CSS to the
NHS CBA at the end of October 2012. The primary output from Checkpoint 3 is a hosting decision and (if successful) a
binding Development Plan.
In order
Checkpoint 3
Timeline Summary, Checkpoint 3
Checkpoint 3 can be summarised as follows:
Monthly BDU site visits to agree, monitor and adapt the binding Development Plans from
Checkpoint 2
Checkpoint 3 guidance published with Enterprise Financial Model, Workshop and Financial
Regime guidance notes
CSS submissions:
full Business Plan
Enterprise Financial Model
Balanced Scorecard
Hosting Guide published describing in more detail the hosting arrangements beyond April 2013
and to externalisation
Assessment activities
CCG Survey
CSS Staff Survey
Due Diligence
NHS CBA visit to CSS Site
NHS CBA decides which CSSs will be hosted from April 2013
November onwards:
Binding Development plans are agreed, implemented and monitored/supported by the BDU on
a monthly basis to April 2013.
Checkpoint 3
Objective and Purpose of Checkpoint 3
“The Full Business Plan (FBP) by the end of August 2012 will describe the business model fully and comprehensively ”
Checkpoint 3 is a phase rather than a step, which starts from submission of FBPs at the end of August and ends once the
NHS CBA has made decisions about those CSSs progressing to hosting.
Only CSS’s who have fulfilled their commitments under their binding Development Plan from Checkpoint 2, as assessed by
the BDU (with input from SHAs) will be permitted to proceed to Checkpoint 3.
Checkpoint 3 evaluates the ‘commercial viability’ of CSSs for existing and proposed arrangements from April 2013. It tests
all domains in the full Business Plan to draw conclusions about the risks to commercial viability and the scope of services
that the CSS will be licensed to provide under the hosting arrangements.
The Purpose of Check point 3
–To assess commercial viability, in order to:
provide assurance to the NHS CBA that CSSs are ready to trade and can be externalised by March 2016 (and identify those who fail to
provide that assurance)
provide assurance to CCGs and other customers that CSSs are financially viable to deliver high quality and responsive commissioning
To provide binding Development Plans to CSSs that need to be fulfilled before hosting
–To provide the draft licence to operate, under a shadow compliance regime (detailed Hosting Guide to be published later this summer)
Checkpoint 3
Checkpoint 3 Design Principles
The following principles (as used in C1&2) have been used to shape the design of Checkpoint 3 (C3):
• Communicate purpose and ensure assessments are consistent with this purpose
• Ensure clear criteria for assessment and feedback
• Design a predictable process, supporting the purpose, with open and ongoing communication
• Focus tests on commercial viability and evidence sought in these areas
• Include all evidence Full Business Plan and Financial Model and site visit
• Focus on the fundamental tests of commercial viability
• For all other tests, look at the leading indicators of future success, potential and likely development
trajectory to inform the bespoke development plan for each CSS
• Balance the assessments according to the relative risks of each CSS
• Maintain accountability with CSSs for achievement of the and preparations for hosting
• Maintain CSSs autonomy on strategic and operational decision making matters once licensed:
CSSs do not need to seek permission from the BDU to operate within the terms of their licence
• Exclude the BDU in business decision making, and focus its activity on continuously monitoring
commercial viability and operations within licence terms
• Maintain a process that retains confidence of CCGs, BDU, SHAs and PCT Clusters
• Maintain a process that helps CSS and CCG development
Design of Checkpoint 3
Outputs from Checkpoint 3
There will be three core outputs from Checkpoint 3:
1. The first output will be the result of a formal assessment of the CSS position at Checkpoint 3 against a set of
fundamental tests of commercial viability. It will set out the rationale as to why the CSS either has or has not been
assured to proceed to hosting. The result of the formal assessment will be made by the NHS CBA at the 30&31
October 2012 meeting. The result will be public and the detailed feedback communicated to the CSS leader by the
2. Where the CSS has been assured to proceed to Hosting, there will also be a detailed and binding Development
Plan, which will be prepared by the BDU and agreed with the CSS. This plan will set out in in detail:
The development required to reach hosting
The evidence that will be required to demonstrate achievement
The owner of each development objective
The milestone for achievement
Reporting requirements
The Development Plan will be signed by the CSS leader and the BDU. Failure to meet Development Plan
milestones will prompt further assessment of viability to progress to Hosting.
3. The BDU will also provide CSSs with the ‘license to operate’ arrangements which will describe in more detail the
policies, processes and operational arrangements that will underpin hosting.
Design of Checkpoint 3
Checkpoint 3 overview
Post Checkpoint 2
Binding CSS Development and Improvement plan May 2012 – August 2012
Development support from SHA
Monitoring by BDU
Breach of binding agreement?
Decision to Stop
SHA final assessment of completion of Checkpoint 2 Development Plan
Breach of binding agreement
Decision to Stop
August 2012 – March 2013
Binding agreement of licence
terms breached
Decision to Stop
April 2013 – March 2016
Breach of licence terms
Decision to
Checkpoint 3
Checkpoint 3 Commercial Viability
Fundamental Assessment Tests
Draft licence to
Checkpoint 3
Outputs of Checkpoint 2 – 3 Scenarios
CSS Development
Checkpoint 3 Outputs: Two Scenarios
Scenario 1 – CSS
process stops
because a failure
viability tests
Scenario 2 – Proceed to
Hosting with a
requirement for
development and
(Development Plan for
Binding development plan
Licence to operate
Checkpoint 2
Outline Business Plan
March 2012
Viability test
August 2012
Checkpoint 3
Compliance Monitoring
Sept 12 to Mar 13
Checkpoint 3
April 2013
Summary of Evidence base for Checkpoint 3 Assessment:
Checkpoint 3 is a phase that has two discrete elements: a one off assessment of commercial viability (Sept 2012) and ongoing compliance monitoring of the binding Development Plan and draft licence to operate up to April 2013.
The totality of inputs into the viability tests are:
1. C2 compliance: The completed C2 Development Plan summary, approved, validated and monitored monthly by the
BDU: not a C3 test as such, rather a precondition to C3 tests.
2. FBP:
The Full Business Plan submitted by the CSS: “The Full Business Plan (FBP) by the end of August
2012 will describe the business model fully and comprehensively”. (See appendix 1).
3. EFM:
The Enterprise Financial Model submitted by the CSS with input from Cluster Director(s) of Finance
4. DD:
An independent financial Due Diligence report on the CSS commissioned by the BDU
5. Site Visits:
Interview of CSS Team by NHS CBA Panel. Part day on site will also include a session between
CCG leads for that CSS and NHS CBA. A staff session will also be held with NHS CBA Panel.
6. Surveys:
CCG and CSS staff surveys to inform the Customer and Delivery tests.
The inputs into the compliance monitoring process are:
1. Reports defined in the binding Development Plan and related evidence submitted
2. Review by the BDU of progress since Checkpoint 2
3. Additional information as required by the BDU to confirm specific areas of uncertainty within the FBP and EFM
Checkpoint 3
Inputs from CSS/SHA: 1. C2 Development Plan summary
The binding Development Plan agreed at Checkpoint 2 must be assessed by the BDU who will look at:
Has sufficient progress been made?
Has the CSS Team demonstrated a grip of the developmental issues and shown the drive to make the
changes necessary?
Has the CSS Team responded well to change during the monthly BDU visits?
Has the offer to CCG customers been honed and worked up with them?
It is not envisaged the BDU will perform any additional checks as a matter of routine. However, if for any reason it has
cause for concern it reserves the right to require any information needed to satisfy itself and validate that the
development actions have been completed appropriately.
Checkpoint 3
Inputs from CSS: 2. The FBP Document
The FBP will be submitted by the leader of the CSS to the BDU by 31st August the FBP. The FBP will be an evolution of the
OBP, which was defined in the December 2011 guidance.
The key differences between the OBP and the FBP are included in Appendix 1. In summary, these are:
 The level of detail. The FBP will need to set out in much more detail in such areas as the offer to customers, the way
delivery is organised, the management structures that are in place and will be in place and the signed service level
agreements (as draft contracts with customers). They will include the results of any survey carried out.
 The focus on the description of a viable business. While the FBP will demonstrate financial viability, the triangulation
of the EFM with the CSS business, its USPs, the customer focus and delivery capability will be examined at
Checkpoint 3
 The inclusion of the details of the preferred exit plan from the BDU by March 2016. The detailed Hosting Guide will
be published later this year and the options open to CSSs to exit the NHS CBA communicated.
The FBP will be reviewed and assessed by the BDU against both the fundamental viability tests and leading indicators
across relevant domains.
The FBP will be presented by CSS as a ‘living’ document with evidence that it is being used to plan and organise a
commissioning support business that will be commercially viable, customer focussed and a confident provider of high
quality commissioning support services. It should outline the ‘as now’ position of the CSS development story, the
separation of PCT Cluster(s), the ‘as is’ position and the expected development ‘journey’ through hosting and exit.
Checkpoint 3
Inputs from CSS: 3. The Enterprise Financial Model
The BDU will evaluate long-term financial projections to gauge the financial viability and sustainability of the CSS’s
business plan.
The review of the key assumptions underlying the projections will include sensitivity and scenario analyses to evaluate the
impact of the key risks faced by the CSS. To facilitate this review, CSSs will be provided with a financial model template
(Enterprise Financial Model), completed to support the business plan.
See accompanying guidance and slides from the finance workshop.
Checkpoint 3
Inputs from experts: 4. A financial Due Diligence report on the business
Towards Service Excellence makes it clear that Checkpoint 3 will include a due diligence (DD) on the Business Plans at
that point. The due diligence will focus on financial and commercial matters and will be carried out by independent
specialists in this area.
An independent report will set out any areas of risks and concern.
The DD will be carried out on the FBP, EFM and CSS Team.
Most due diligences are carried out on businesses with a trading history, therefore an approach suited for business start up
will be used. The due diligence work will be funded by the BDU.
In addition to the due diligence, the advisers will also provide an independent valuation on the CSS. A further valuation will
be conducted as part of the exit plan to validate the growth and development of the CSS over the hosting period.
Checkpoint 3
Inputs from CSS: 5. Site Visit by NHS CBA
September will see a visit by the NHS CBA to all CSSs as part of Checkpoint 3 assessment.
The purpose of this visit is to:
– Perform a Panel assessment of the CSS on site for the four evidence areas of Leadership, Customer, Business
and Delivery. This part of the visit will follow closely the process for the Panel meeting at Checkpoint 2.
– Meet with CCG leads for that CSS and to hold discussions around the commercial relationship, development
and service agility and innovation
– Meet with a selection of staff to gauge the degree to which new commercial skills, behaviours and mind-sets are
being developed.
Checkpoint 3
Inputs from CSS: 6. Surveys
September will see two key surveys conducted: CCG and Staff
The purpose of CCG survey is to:
Assess the strength of the commercial relationships with the CSS.
Determine the expectation of service flex from the CCG perspective.
Determined the degree to which the CCG expects service flex to be implemented by the CSS.
Determine the CCG view of pricing, risk and responsiveness in the CSS relationship.
Determine the confidence the CCG has in the ability of the CSS to innovate and develop services.
The purpose of the Staff survey is to:
Determine the extent of the staff journey travelled to the new commissioning support skills and behaviours.
Determine the extent to which the CSS Leadership Team have supported them in that journey.
Determine the strength of staff engagement that has taken place through 2012.
Determine the staffs’ views of the CSS Leadership Team.
Checkpoint 3
Monitoring Inputs: Binding Development Plan and associated reports
As with Checkpoint 2, the BDU will produce a Development Plan for the CSS to agree, with binding obligations that need to
be met before hosting on 1 April 2013.
The Development Plan will also include reporting requirements to the BDU as it prepares for hosting. This will include a
monthly submission of a Balanced Scorecard and a monthly visit by the BDU. More guidance on the balanced scorecard,
including will circulated shortly
The breadth, depth and frequency of reports will be tailored for each CSS and proportionate to the risks identified by the
BDU during the commercial viability assessment.
Reporting will be direct from the CSS to the BDU. Should the CSS not fulfil the binding obligations in the agreed
Development Plan, the CSS will be removed from the process, and an alternative solution identified with CCGs.
Checkpoint 3
Monitoring Inputs: Draft licence to operate and associated reports
Alongside the development plan, the ‘license to operate’ arrangements (provisional from October and more formal from
April 2013) will describe the rules, processes and policies that will underpin the operational arrangements of CSSs during
the hosted period. More information on this will be shared in the Autumn.
As part of these arrangements there are likely to be some additional checks up to and during hosting that provides the
Commissioning Board with the necessary reassurance that CSSs continue to provide efficient, responsive and viable
Checkpoint 3
Checkpoint 3 Assessment Tests – Introduction
There will be two assessments at Checkpoint 3. The first is formal assessment of the CSS position at Checkpoint 3
against a set of fundamental tests of commercial viability. The tests will cover:
Commercial viability - The criteria will cover:
 The triangulation of leadership, customer, delivery and business development domains into a coherent, confident and credible CSS. This
will also include an adapted variant of the OGC Gateway 4 tests
 The strength of the business pipeline which will include both the track record of existing services and payments, strength of committed
future income including signed SLAs for 2013/14 and will include other documentary evidence of customer agreement, commitment or
 The robustness of commercial plans including the clarity, coherence and credibility of service line plans
 A fully developed operating model which demonstrate the fitness of model to customer reach and service offering and the appropriate use
of supply chain partners and evidence of agreement
 A fully developed Enterprise Financial Model with detailed sensitivity analysis including commercial risks
 Due diligence and valuation. This will be an independent opinion as to the CSSs 4 year commercial viability and the identification of key
risks and concerns This will also include a provisional valuation .
 The degree of commercial capability within the CSS. This includes both the CSS leader and the leadership team
 A preferred commercial exit plan from hosting by the BDU by March 2016.
Governance - The criteria will cover:
 Compliance with NHS CBA financial regime and the necessary financial controls
 Compliance with NHS CBA governance regime. This will include an assessment of corporate governance and management; High level
controls; Risk assessment framework and Management reporting framework and operational KPIs in the Balanced Scorecard.
Design of Checkpoint 3
Checkpoint 3: Implementation – Roles of the BDU and SHA clusters
Role of the BDU
• The BDU retains sole responsibility for Checkpoint 3, from submission of FBP to Hosting.
• The BDU will assess FBP documents following their submission on 31st of August against commercial viability
assessment criteria.
• Following its review of the FBP and independent due diligence report, the BDU reserves the right to request
additional information it deems necessary to make a decision on whether to proceed to hosting arrangements.
Role of the SHA
• SHAs will continue to support CSS development following Checkpoint 2 and assist the resolution of issues that
threaten successful assessment at Checkpoint 3.
• Where CSSs fail to demonstrate that they have passed the viability, SHA clusters will be responsible for
completing the impact assessment and support CCGs and PCT Clusters to resolve the implications on CCG
authorisation and CSS staff.
• Development Plans agreed by the BDU with CSS will be shared with SHAs and they will continue to provide
development support to CSS up to Hosting.
Role of the PCT Cluster
• The PCT Cluster should confirm arrangements for separation.
Checkpoint 3
Checkpoint 3 Timeline
Key processes
C3 Design
Monthly Monitoring
FBP Template
Governance regime
Financial regime
EFM training
Due diligence
C3 Development
Draft Licence
Draft Compliance
Checkpoint 3
Publish Implement
Checkpoint 3: Timeline between C2 Binding Development Plan and 31st
The BDU retains responsibility for Checkpoint 2 Development Plan Monitoring.
Monthly site visits will continue by BDU staff to ensure the development needs addressed at Checkpoint 2 are being met.
Each month RAG ratings will be applied to all CSSs across the key evidence tests (Leadership, Customer, Business and
This monthly activity takes place up until the end of August when the full Business Plan, Enterprise Financial Model and
Balanced Scorecards are submitted for Checkpoint 3.
Checkpoint 3
of the
the CSSprocess
CCGs evolve mission,
ethos, vision, operating
model and begin to discuss
do/buy/share options and
define commissioning
support requirements
Early plan and
Sept – Dec 2011
As part of preparations for
authorisation, CCGs
establish firmer
agreements with CSS and
demonstrate management
costs are within envelope
Stage 1
Initial implementation
Jan – Jun 2012
process and timescales
CCGs work with CSS to
establish Service Level
Agreements. While
‘shadow’ CSS and Cluster
Teams are supporting
CCGs to this point, CCGs
from Oct 2012 are
receiving CSS consistent
with management cost
Stage 2
Jun - Oct 2012
• Forming ethos, values,
mission, and early customer
• Key functions identified for
potential inclusion in CSS
• At scale activities defined
• High level review of the
potential market players
• Governance arrangements
confirmed to enable design
• Commissioning Support
value proposition confirmed
• Decision on arrangements
for April 2013 – host or
• CSS leadership and
business development team
in place
• Organisational architecture
• Planning completed and
design principles agreed
• Value proposition completed
• HR and OD plan in place
• Staff consultation
• Assets, estates &
supporting infrastructure
• Finance, costing and pricing
structure emergent and
visible; consistent with
• Model CS contract
• CSS commence in shadow
• Risk assessment and
mitigation plans in place
• PCT clusters implementing
TUPE consultation and staff
transfers as appropriate
• Customer relationships and
marketing and approach
• Evidence of CSS contract
pipeline with MOA/SLA for
contract 2013/14
• Due diligence undertaken
on plans
• Notation or assignment of
existing contracts confirmed
• Partnership arrangements
• Commercial plans produced
• NHSCB decision of support
to be hosted
Checkpoint 1
Service Prospectus
December 2011
Checkpoint 2
Outline Business Plan
March 2012
Checkpoint 3
Full Business Plan
August 2012
CCG acting as customer of
CSS. Period of time
provides track record of
delivery required for
approval and
Oct – Apr
• Compliance with assurance
• Contracts and SLAs agreed
• 360 assessment of business
models undertaken
• Risk assessment and
mitigation plans in place
• Performance monitoring
systems established
• Formal transfer to hosting
• CSS trading under
NHSCBA hosting
C3 Compliance Monitoring
Annex 1: The FBP Document
Executive Summary – updated from OBP
Vision and Purpose - updated from OBP
Context and Planning Assumptions – updated from OBP (focus on local context, agility and
responsiveness to market/customer changes in demand)
Market Analysis – updated from OBP (show here or in E, impact of analysis on value proposition, USP and
Customer Strategy – updated from OBP.
Operating Model Design – updated from OBP (including a detailed section on Innovation and service
Organisation Design and Leadership – updated from OBP.
Supply Chain and Partnering Strategy – updated from OBP.
Governance – updated from OBP.
Finances – updated from OBP. See Finance Guidance and Enterprise Financial Model (separate)
One year and three year Programme Plan – updated from OBP
Appendix – updated from OBP
Checkpoint 3
Commissioning Support Services:
Checkpoint 3
June 2012
Building choice of high quality support for commissioners

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