Technical Assistance Consultant’s Report

Project Number: 50033-001 October 2020

People's Republic of China: Strategies for Involving Social Organizations in Social Assistance

Prepared by Prof. Kinglun Ngok (Team Leader) People's Republic of China

For the Ministry of Civil Affairs

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents.

CURRENCY EQUIVALENTS (as of 10 August 2020)

Currency Unit – yuan (CNY) CNY1.00 = $0.1435 $1.00 = CNY6.9680

ABBREVIATIONS

ADB – Asian Development Bank CCP – Communist Party of China MOCA – Ministry of Civil Affairs NGO – nongovernment organization NPM – New Public Management NPO – nonprofit organization PPP – public–private partnership PRC – People’s Republic of China SO – social organization TA – technical assistance

NOTE

In this report, "$" refers to United States dollars. i

Contents

List of Tables and Figures ...... ii Acknowledgments ...... iii EXECUTIVE SUMMARY ...... iv I. INTRODUCTION ...... 1 II. INVOLVING SOCIAL ORGANIZATIONS IN SOCIAL ASSISTANCE IN THE PRC: POLICY FRAMEWORK ...... 2 III. INTERNATIONAL GOOD PRACTICES IN CONTRACTING SOCIAL ASSISTANCE SERVICES AND THEIR IMPLICATIONS FOR THE PRC...... 7 IV. CONTRACTING OUT SOCIAL ASSISTANCE SERVICES IN AUSTRALIA AND IMPLICATIONS FOR THE PRC ...... 10 V. GENDER-AWARE PROCUREMENT: OVERSEAS EXPERIENCES AND THEIR IMPLICATIONS FOR THE PRC ...... 15 VI. NATIONAL EXPERIENCES OF CONTRACTING SOCIAL ASSISTANCE SERVICES IN THE PRC ...... 21 A. National case studies ...... 21 B. National experiences: questionnaire survey ...... 27 C. National experiences: focus group discussions ...... 34 VII. PLANNING SOCIAL ASSISTANCE PROCUREMENT ...... 35 A. Procurement Risk Management ...... 36 B. Project Planning Capacity in Contracting of Social Assistance ...... 37 C. Identify Challenges in Purchasing Tasks ...... 41 D. The Selection Strategy of Procurement Methods ...... 43 VIII. GUIDELINES FOR THE PROCUREMENT MANAGEMENT OF SOCIAL ASSISTANCE SERVICES ...... 44 IX. POLICY RECOMMENDATIONS FOR GOVERNMENT PURCHASE OF SOCIAL ASSISTANCE SERVICES IN THE PRC ...... 51 Appendix 1: Selected National Government Policy Documents ...... 56 Appendix 2: Training Program and Focus Group Discussion Participants, Chengdu, August 2019...... 57 Appendix 3: TA 9126-PRC Design and Monitoring Framework and Status Update .. 63

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List of Tables and Figures

Table 1: Types of Social Assistance Purchase Tasks ...... 3 Table 2: Gender Awareness in Procurement Cycle ...... 21 Table 3: National Cases Studies ...... 22 Table 4: Matrix Analysis Chart of Stakeholders’ Relevance in Purchasing Project ... 39 Table 5: The Logic of Investment-Implement-Result of Purchasing Project ...... 40 Table 6: Self-Check Purchasing Readiness ...... 43

Figure 1: Relationship Among Stakeholders ...... 38 Figure 2: Creating Purchasing Proposals ...... 47

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Acknowledgments

This study was conducted under the direction of Dr. Xitang Liu, Director General of the Department of Social Assistance, Ministry of Civil Affairs (MOCA) of the People’s Republic of China. All technical sub-reports were prepared by a consultant team engaged under ADB Technical Assistance 50033-001 Strategies for Involving Social Organizations in Social Assistance, including team leader Professor Kinglun Ngok of Sun Yat-sen University, international consultants Mel Cousins of Trinity College Dublin and Dr. Yu Chan of the University of Hong Kong, and national consultant Dr. Zhaiwen Peng of Sun Yat-sen University. This report was prepared by Professor Kinglun Ngok with the assistance of Dr. Chen Nie of Beihang University. This report greatly benefited from valuable review and feedback provided by Director Lin Zhang, General office of Department of Social Assistance, and Professor Guosheng Deng of Tsinghua University, Professor Xiaoyan Huang of Naikai University Professor Jianping Yao of North China Electric Power University, who served as resource people for the final TA workshop in October 2019 in Beijing.

The ADB team comprised Karin Schelzig, Principal Social Sector Specialist, Jayati Nigam, Health Specialist, and Maria Victoria Dela Cruz, Project Officer. ADB commissioned the Australia New Zealand School of Governance (ANZSOG) to organize the successful study visit for 6 MOCA officials to Canberra and Sydney.

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EXECUTIVE SUMMARY

Government purchase of social services has been carried out nationwide in the People’s Republic of China (PRC) since the beginning of the 21st century. Since 2014, several national regulations on government procurement of goods and services have been formulated to provide clearer administrative regulations on the fairness and transparency of public service procurement. Building the policy framework for government purchase of social service has created more opportunities to involve social organizations (SOs) in delivering social assistance services. Against this background, the Asian Development Bank (ADB) technical assistance (TA) project Strategies for Involving Social Organizations in Social Assistance (TA 9126-PRC, 2016-2020) aimed to identify and develop guidelines and concrete local level processes for SOs engaging in the contracted delivery, support, monitoring and review of social assistance services.

Policy framework. In September 2017, the Ministry of Civil Affairs (MOCA), the State Commission Office of Public Sectors Reform, the Ministry of Finance, and the Ministry of Human Resources and Social Security jointly issued the "Opinions on Actively Promoting Government Purchase of Social Services and Strengthening the Service Capability of Grass-roots Social Assistance Services Agencies". Being the most important policy document for promoting government procurement of services in the field of social assistance so far, this document outlines the key elements of the policy of contracting social organizations for delivering social assistance services, which include the policy idea, policy objectives, services purchasers, services providers (contractors), categories of contracted services, procurement methods, financing, assessment, and supervision and accountability.

International experiences. By focusing on the context and details of practice of contracting out in the area of social services in New Zealand (NZ), United Kingdom (UK) and the United States of America (USA), the international good practices offered some suggestions, including (i) examining the broader concept of commissioning, (ii) MOCA playing a lead role as system steward, (iii) a need for training and capacity building at all levels, (iv) adopting a phased approach, (v) considering the use of tied grants and piloting performance-based contracts, (vi) establishing a forum for sharing experiences, (vii) considering gender-based needs and services, and (viii) protecting the autonomy of SOs.

Study tour to Australia. Organized by the Australia New Zealand School of Governance, MOCA officials were able to learn from Australian experiences and practices, showing that the establishment of scientific, standardized, and operable implementation procedures is the key to government purchase of social services. Considering the fact that the PRC’s SOs and government purchase of social services are underdeveloped, it is necessary for the PRC to further clarify the implementation procedures of purchasing services and build a systematic and effective procedural system to guide the practice of purchasing services, providing a policy basis for the government purchasing social assistance services. The PRC also should strengthen v

the supervision and management of the government purchase of social assistance services, improve monitoring and evaluation before, during and after the event, and ensure that the purchase behavior is open, transparent, standardized and effective. It is also necessary for the PRC to pay much more attention to the cultivation and development of the potential contractors.

Gender-aware procurement. Cases in Hong Kong, China; Taipei,China; UK, and the USA, all show that incorporating gender awareness in service-purchasing contracts can assist the achievement of social goals. In order to design appropriate guidelines to improve the gender responsiveness in the procurement of social assistance service in the PRC, it is important to embed procurement designs with gender awareness in four purchasing stages (preparing and researching, planning and approval, publishing and reviewing, purchasing and evaluating) and distribute them throughout the purchase process.

National experiences. Case studies were undertaken to identify features of government purchase of social assistance services in the PRC. First, facing the accountability pressure, local governments prefer to purchase administration-oriented tasks. Second, due to the lack of a mature market and/or supply structure, social organizations do not have any competitive advantage in social assistance service outsourcing. Third, local governments prefer ‘human resources placement’ rather than social service outsourcing, i.e. purchase of staff rather than services. Fourth, most social assistance outsourcing contracts are designed with more emphasis on process accountability and less emphasis on outcome or performance accountability. To address these challenges, the following five areas still need to be improved: (i) Specifications, responsibilities and performance of service purchase; (ii) Coordination, relationships and roles of service implementation; (iii) Recognition of the mutual interaction between the motivation of SOs to participate in services purchasing and the strategic analysis of the investment about social assistance procurement and organizational development; (iv) Development of capacity for civil affairs departments which are responsible for social assistance for new service business, especially to establish a stable supply market; and (v) Management system strengthening for civil affairs departments.

Survey results and focus group discussions. The TA survey and focus group discussions covered all aspects of the practice of procurement in social assistance before, during and after the implementation of service outsourcing, such as purchase motivation and purpose, identification of public needs, purchase information release, purchase goals, purchase methods, purchase barriers, supervision of the institutions, and so on. These results suggest that: (i) government purchase of services can improve efficiency and quality of public service supply; (ii) high-level policies have promoted the implementation of local government purchase of services and their success;

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(iii) insufficient development of social organizations hinders their capacity to participate in social governance; (iv) the construction of the after-event evaluation system for outsourced services needs to be strengthened; and (v) the government faces greater uncertainty in purchasing services.

Strategy for social assistance procurement. Planning these requires a combination of uniformity and flexibility to guarantee the purchased services meet the purchasing needs of civil affairs departments, and taking many factors into consideration, such as the maturity of the market, financing factors, cost factors, connectivity between civil affairs department and the supply-side, the proposed task’s level of technicality and the SO’s ability to provide the service. The TA developed a comprehensive procurement strategy comprising 9 stages from establishing a work system for civil affairs departments to purchasing services from SOs, to department management. The 9 stages are further divided into 25 detailed steps.

Guidelines for the procurement management of social assistance services. Guided by the principles of good practice in contracting social assistance and social services, the 9 stage, 25 step service-purchasing process is based on eight principles: (i) Promoting results-oriented planning, with the benefits of the recipients of the services as a core; (ii) Understanding the needs of users of social assistance service and the relevant stakeholders; (iii) Setting clear goals to ensure the benefits of service procurement, the use of effective financial capital, functions transformation, and achieving good public governance; (iv) Increasing social organizations' level of participation and directly communicate with them, to ensure the quality of services; (v) Considering the principle of necessary capacity, to encourage capable social organizations to participate in the provision of services; (vi) Ensuring transparency in the procuring process; (vii) Signing long-term contracts and taking risk-sharing measures to guarantee the efficiency and results of service procurement; and (viii) Seeking feedback (including service users, communities and social organizations) to ensure service results and purchasing management performance.

Policy recommendations. To promote the purchase of social assistance services by local governments and improve the service capabilities of SOs at the grass-roots level, policy recommendations focus on three broad aspects: (i) increasing government policy support and financial investment; (ii) cultivating SOs to improve their capacity to deliver social assistance services; and (iii) improving performance of the outsourced social assistance services. This report also provides suggestions to enhance the feasibility of contracting out service management, such as establishing a working vii

mechanism for collaboration among financial departments, civil affairs departments and SOs; promoting the connection between the purchase of social assistance services and SOs; and developing a more proactive and extensive learning platform to carry out effective training activities.

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I. INTRODUCTION

1. With the formulation of the Guiding Opinions of the Ministry of Civil Affairs and the Ministry of Finance on the Government Procurement of Social Work Services and the Guiding Opinions of the General Office of the State Council on the Government Procurement of Services from Social Forces in 2012 and 2013 respectively, government purchase of social services has been carried out nationwide in the People’s Republic of China (PRC). Since 2014, several additional national regulations on government procurement of goods and services have been formulated to provide clearer administrative regulations on the fairness and transparency of public service procurement (Appendix 1). Building the policy framework for government purchase of social services has created more opportunities to involve social organizations (SOs) in delivering social assistance services. Against this background, the Asian Development Bank (ADB) technical assistance (TA) project Strategies for Involving Social Organizations in Social Assistance (2016-2020) aimed to identify and develop guidelines and concrete local level processes for SOs engaging in the contracted delivery, support, monitoring and review of social assistance services. The TA was executed by the Department of Social Assistance, the Ministry of Civil Affairs (MOCA).

2. The TA project aimed to identify or develop guidelines for and concrete local level processes for SOs engaging in the contracted delivery, support, monitoring and review of social assistance services. The TA was aligned with two impacts: contracted delivery of MOCA social assistance by social organizations improved (from the State Council’s 2014 Interim Measures for Social Assistance) and a specific, market-oriented government procurement method designed (from the State Council’s 2014 regulation on Establishing the System for Temporary Assistance). The expected TA outcome was a stronger enabling environment and local processes for MOCA contracting of social assistance delivery to SOs.

3. In order to achieve the outcome, the TA had four main outputs: timely policy recommendations, contracting strategies guidelines, and indicators, gender-sensitve case studies, and knowledge products. The TA expert team produced a report on PRC and international good practices and experiences involving SOs on contracted social assistance delivery and mechanisms for monitoring; international and regional gender- sensitive case studies of local government contracting social organizations for delivery of social assistance; technical and policy recommendations and mechanisms, measures and methods for local contracting of SO in social assistance; and organizing an international study tour and a training program (participants are listed in Appendix 2). The TA design and monitoring framework and status of acheivements as of August 2020 is in Appendix 3.

4. A TA inception workshop on 27 September 2017 in Guangzhou established a clear work plan. The interim workshop on 15 September 2018 in Guangzhou ensured the tasks would be accomplished in the expected timeframe. A final workshop to review TA findings took place in October 2019 in Beijing. The consultant team’s research

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methods included, among others, fieldwork, interviews, focus groups, questionnaire surveys, case studies, policy consultations and analysis, and an international study tour. The four key tasks were accomplished as expected. All sub-reports were completed, including on national experiences, international good practices, the management guidelines on local government contracting social organizations for delivery social assistance, and case studies.

II. INVOLVING SOCIAL ORGANIZATIONS IN SOCIAL ASSISTANCE IN THE PRC: POLICY FRAMEWORK

5. International experiences confirm that social assistance services play a significant role in preventing and fighting poverty, reducing the risks of social exclusion, and improving the quality of life for socially vulnerable groups. In recent years, the Chinese government has introduced new policies and measures to develop social assistance services and build a service-oriented government: (i) In September 2013, the General Office of the State Council issued the Guiding Opinions on the Government Purchase of Services from Social Forces, pointing out that the government should gradually increase its purchase of services from social forces and give full play to the role of social forces in the field of non-basic public services. (ii) In February 2014 the Interim Measures for Social Assistance were issued. The measures establish a comprehensive and clear social assistance system and stipulate that local governments at or above the county level can purchase specific services related to social assistance from social forces (SOs) through entrustment, contracting and procurement. (iii) In 2015, the MOCA and Ministry of Finance (MOF) issued the Opinions on Accelerating the Development of Social Work in the Field of Social Assistance, further clarifying that developing social assistance, including social work and services, is an inevitable requirement for building a modern social assistance system. (iv) In September 2017, the MOCA, the State Commission Office of Public Sectors Reform, the MOF, and the Ministry of Human Resources and Social Security jointly issued an official document, which is the Opinions on Actively Promoting Government Purchase of Social Services and Strengthening the Service Capability of Grass-roots Social Assistance Services Agencies (the opinions). This is the most important policy document for promoting government procurement of services in the field of social assistance so far, which is conducive to strengthening the ability to handle social assistance service at the grassroots-level and providing timely, efficient and professional assistance services for the target groups requiring social assistance.

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6. The opinions outline the key elements of the policy of contracting social organizations for delivering social assistance services, which include the policy idea, policy objectives, services purchasers, services providers (contractors), categories of contracted services, procurement methods, financing, assessment, and supervision and accountability.

7. According to the opinions, the policy idea of contracting social organizations for delivering social assistance services is to play the role of market competition mechanism in the areas of social assistance and improve the management and operation efficiency of social assistance. Its objectives are to (i) improve the target efficiency of social assistance (including supervising the local government to reasonably set the standard and qualification of the minimum guarantee assistance, and improving the adequacy of the standard), and (ii) better response to the risks and needs of low-income groups: service security. The key purchasers are the local governments at or above the county level, and their civil affairs departments are specifically responsible for organizing and implementing the work of the service purchase. In the process of services purchase, civil affairs department needs to play two special leadership roles.

8. One is to promote the formation of a supply market structure, which is to decide the types of services to be purchased and the suppliers. The other one is to promote the construction of standardization about the supply market and determine the qualifications and specifications of technical capacity for entering the market. Township governments and sub-district offices may also purchase social assistance related services. The key services providers include public organizations, enterprises, social organizations, they are named as social forces.

9. In accord with the opinions, contracting out social assistance services can be divided into two major categories: administration-oriented tasks (事务性工作 ) and service-oriented tasks (服务性工作 ). The former includes home surveys, means test, services training, planning, research project, policy promotion, and performance evaluation. The latter includes medical care and nursing, rehabilitation training, medical escort, social integration, abilities improvement, psychological counselling and resources linking (see Table 1).

Table 1: Types of Social Assistance Purchase Tasks

Administration-oriented tasks Service-oriented tasks Home survey about social assistance Care and medical help for social service recipients recipients (rescue targets) Investigation about social assistance Rehabilitation recipients Provided training on social assistance Accompanying and escort services Promotion about social assistance policy Social inclusion training

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Administration-oriented tasks Service-oriented tasks Social assistance performance evaluation Capacity training Social assistance law consultation Psychological consultation Social assistance data analysis Services related to resources linkage Source: TA consultants.

10. The procurement methods combine tender model and non-tender models. The tender models include open tendering, competitive negotiation procurement, and invited tendering. The services purchase projects that reached the standards of the amount of the public bidding should take the open tendering approach. For the service items listed in the procurement catalogue by the local civil affairs departments, the procurement of services should not be conducted in the form of "splitting the whole into parts" or in other ways to avoid public bidding. The advantages of this approach are high competitiveness, high transparency and standardized procedures. The disadvantage is that the procedure is complicated and takes a long time, which may need to be supplemented by other means of procurement.

11. Competitive Negotiation Procurement (竞争性磋商采购) is applicable to the service purchase projects with the following features: (i) the service technology is complex or special, and their detailed specifications or requirements cannot be confirmed; and (ii) scientific research projects with insufficient market competition, and the projects that need to be supported for the transformation of scientific and technological achievements. The advantage of this method is that compared with public bidding, its bidding-waiting period is short. The lower limit of bidding is favorable for smaller projects.

12. Invited Tendering (邀请招标) is applicable to suppliers (social organizations) with certain corresponding qualifications. It usually has the following characteristics: (i) this approach is special—the purchasers can only select suppliers from a limited range; and (ii) the cost of public bidding has an over-large proportion in the total value of the procurement project.

13. Non-tender models include competitive consultation procurement, single source procurement and request for quotation procurement.

14. Competitive Consultation Procurement (竞争性谈判采购) is applicable to: (i) after the bidding, there is no qualified bid or failure to establish a re- tender; (ii) the technology required by the target services is complex or special, and the detailed specifications or requirements cannot be confirmed; (iii) failure to meet the urgent needs of users due to issues that purchasers could not expect or excessively long bidding time (not caused by the delay of the purchaser); and (iv) the total amount of price cannot be budgeted in advance—services that lack cost information due to the uniqueness or complexity of procurement targets and lack of relevant procurement 5

experiences. This approach is beneficial to achieving policy-related goals and ensures the mutual benefits of both parties at specific stages.

15. Single-Source Procurement (单一来源采购) is applicable where (i) the technology required for the service is irreplaceable proprietary technology; (ii) unpredictable emergencies happened that prevent purchasing from other suppliers; and (iii) the procurement content is consistent or complementary to the service that has already been purchased, so the new services can only procure from the original supplier. The strengths of this procurement method are that the procurement cost is small and the process is simple and convenient. Its weakness is that it is not competitive and transparent.

16. Request for Quotation Procurement Method (询价采购) is more applicable to procure social assistance goods with a smaller proportion of content, the specifications and standards are unified, the supply sources are sufficient, and the price changes are small. The strengths are it is efficient, time-saving and easy to process, but this approach lacks transparency and competitiveness.

17. The funds needed by the government to purchase social assistance services shall be included in the financial budget, which shall be arranged as a whole from the existing funds for social assistance work or special funds for social assistance at all levels. All localities shall gradually increase the capital investment of the government to purchase social assistance services according to the actual needs.

18. Service purchase projects are subject to performance evaluation. A comprehensive evaluation mechanism composed of the buyer, the service object and the third party should be established. The evaluation will focus on service effectiveness, project management, social impacts and other aspects. The satisfaction evaluation of the service users will be highlighted. The evaluation results will be released to the public and serve as an important reference for the selection of the contractors (providers) in the future.

19. All local authorities are required to strengthen the supervision and management of the government's purchase of social assistance services, improve the supervision system before, during and after the event, clarify the responsibilities of departments, implement comprehensive supervision according to law, and ensure that the purchase behavior is open, transparent, standardized and effective. The purchasers shall publicize the relevant information of purchasing services according to the regulations, and take the initiative to accept audit supervision, social supervision and public opinion supervision. Civil affairs departments staff should take into account the characteristics of different procurement methods, consider local conditions, and choose the corresponding procurement approaches according to the actual situation of each region, so as to improve the efficiency of government procurement funds, improve the quality of procurement management, and deal with the issues of

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inefficiency. The services providers shall actively accept the supervision of the purchaser, improve the financial reporting system, ensure the quantity, quality and effect of services, and strictly prohibit service subcontracting.

20. Although social assistance is a key driving force to achieve the sustainable development goals of poverty eradication and gender equality, the Opinions lack a clear gender-sensitive perspective. No concept of gender aware procurement is mentioned.

21. The introduction of the opinions in 2017 is a key node since it requires the government to implement the work of purchasing social assistance services from social forces comprehensively during the period of Thirteenth Five-Year Plan, 2016– 2020, and further improves relevant policies and mechanisms. Since its introduction, the document has greatly promoted the purchase of social assistance services by local governments. By the end of June 2019, 31 provinces (both district levels and municipalities) had issued specific opinions for implementation.

22. The opinions were introduced in Hebei, Inner Mongolia and Gansu in 2017, to Shanghai in March 2019, and to the other areas in 2018. Among them, the Organization Department of Provincial Party Committee was added to the countersignature in Hunan, while in other provinces, it was the Civil Affairs Department together with the Commission Offices for Public Sector Reform, the Department of Finance, and the Department of Human Resources and Social Security that have issued supporting policies. Many local governments further clarified the expenditure ratio when supporting documents were designed. 13 provinces, including Shanxi, Inner Mongolia, Liaoning, Jilin, Anhui, Jiangxi, Hunan, Guangxi, Shanxi, Gansu, Qinghai, Tibet, and Xinjiang, have made clear their expenditure ratios by setting the highest proportion of the expenditure for contracting social services to the special fund of the year for social assistance. 25 provinces, such as Tianjin and Hebei, have proposed particular ratios or the numbers of professionals at the basic level.

23. All provinces have specified clear requirements for the allocation of staff for social assistance (or civil affairs departments) at village level. Based on the data collected from the questionnaire survey on the staff in civil affairs departments at all levels conducted by the TA consultant team in August 2019, over 50% of local civil affairs departments have started to purchase social assistance services from social organizations since 2017: 34.9% and 24.1% of survey units that respondents belong to started to purchase social assistance services in 2017 and 2018 respectively. This survey finds that policy support is considered as the most important driving force for the purchase of social assistance services, and the main purpose is to improve service quality and transform government functions. At present, nearly 80% of civil affairs departments have included the purchase of social services in their financial budget, and 90% of them have set clear purchase targets.

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III. INTERNATIONAL GOOD PRACTICES IN CONTRACTING SOCIAL ASSISTANCE SERVICES AND THEIR IMPLICATIONS FOR THE PRC

24. The international good practices on contracted social assistance delivery provide both overview and details of contacting out in the area of social services in the three countries selected: New Zealand (NZ), United Kingdom (UK) and the United States of America (USA). It focuses on not only the context of contracting and how it has developed over time, the areas in which contracting out is used and identifies some key lessons based on country experiences, but also detail at specific experiences of contracting out in relation to social assistance and discusses practice in relation to issues such as procurement, monitoring and evaluation, etc. Finally, it offers some recommendations based on those good practices which appear to represent a ‘best fit’ for Chinese conditions.

25. The UK has a long history of contracting. In the area of social assistance (cash end employment supports), contracting out has been mainly carried out in relation to the provision of employment services. In terms of ‘procurement’, studies and evaluations of contacting in the UK show that it is based on a ‘commissioning’ approach. This involves a cycle of activities beginning with an analysis of needs, resources, the market and risks; moving on to planning how to meet identified needs with the available resources; taking action through, for example, tendering and contract management; and monitoring and reviewing the approach which has been adopted to inform necessary changes. Procurement itself is just part of this broader commissioning model. In terms of social force, non-profit agencies have been involved in the provision of social services for many decades. The service providers should be encouraged to and rewarded for producing outcomes which reduce the longer-term need for services and achieve agreed outcomes. The results-based payments can play a positive role in improving outcomes but that it is important to have clear goals and to focus on a limited number of priority outcomes. In terms of good practices, ‘joint commissioning’ of social care services has been developed in the UK, where a number of different agencies are involved, commissioning can be carried out jointly. There are a wide range of different approaches to this ranging from coordinated commissioning where two (or more) agencies commission separately with independent budgets and priorities but with close liaison through lead commissioning where one agency acts as the lead agency with an integrated pooled budget. This allows a single view of priorities and shared resources but requires mutual trust between the agencies involved. In the context of the general move in the PRC to contract out more services to social organizations, joint commissioning could be used as one method to improve the co- ordination of policies between different agencies at a local level.

26. New Zealand’s history of non-profits providing social services often includes support by government grants. In the late 1980s and the 1990s, government support for these agencies shifted from being predominately grant-based funding to contract-based funding. In terms of purchase process, in New Zealand, government agencies generally used competitive tendering processes to select service providers but unlike tenders for private services, providers of social services

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usually do not compete on price. Rather, government agencies select the provider on the basis of the provider’s knowledge and capability and their relationship with the targeted client group. Since 2013, The New Zealand Ministry of Social Development (MSD) has been implementing an ‘Investment Approach’ to designing and targeting employment services. As part of the Investment Approach, MSD contracts non- governmental Youth Service (YS) providers to help at-risk young people to achieve education outcomes and so reduce their risk of long-term dependence on income support.

27. The USA has developed strong support for contracting out social services. The 1980s and 1990s saw the development of the New Public Management approach and a change in political culture. The USA has probably the most extensive experience of contracting out of social assistance and social care services of any country. In the area of social assistance, there has been extensive experience of contracting out employment services and at least pilot efforts to contract out a much wider range of services, including case management, up to experiments in contracting out the entire Temporary Assistance for Needy Families (TANF) system. Despite the extensive experience, it is important to note that there is limited evidence in the area of social assistance, that contracted out systems work better than publicly provided systems. There is also limited evidence that competitive procurement leads to better outcomes and NPOs perform better than for-profit bodies. The considerable emphasis has been put on developing system of performance-based contracting (or results- based financing) where the contractors are rewarded for meeting certain targets set by the public body and specified in the contract. Meanwhile, there have been a range of capacity building projects for NGOs, often provided by the funding agencies.

28. Centered on questions of which functions to contract out, objectives and competition of procurement, grant or procurement, steps of procurement processes, evaluating proposals, designing contracts, payment structures, monitoring and evaluation, co-ordination of services, there are several lessons based on the international good practices. Firstly, contracting out of social assistance is a broader process than just procurement of services and involves an assessment of services needed and resources available, and decisions on which services to contract out, in addition to the procurement itself. Secondly, contracting out is not easy and is not a panacea for the provision of services. Agencies must prepare to address the challenges of contracting out and need to be provided with the resources to do so. Thirdly, the ‘market’ for social assistance service is imperfect and, in many cases, there have been insufficient qualified tenderers to provide real competition. Thus, a large part of the work of public agencies involves building and managing the market. Fourthly, the procurement process must be designed to be fair, effective and transparent. Fifth, contract design needs to be right to maximize the benefits of contracting out. Sixth, monitoring is essential but imposes significant burdens of public agencies (and suppliers). Seventh, public agencies must find effective ways to coordinate services. Eighth, public agencies should be sensitive to gender issues (and issues such as disability) in both the commissioning and procurement processes. Finally, all cases suggest importance of involving the public in the planning and implementation of 9

contracting out and protecting the autonomy of NPOs to preserve their unique identify and status.

29. Although some good practices have been identified, it is not possible simply to transfer good practices from the countries studied to the PRC given the differences in context between them. The Chinese authorities should look for those examples of good practice which represent a ‘best fit’ in the Chinese national and regional context. (i) The Chinese authorities should examine the broader concept of commissioning in the sense of a process of analysing needs and resources and deciding which services are best contracted out rather than focusing more narrowly on procurement of services. (ii) MOCA should play a lead role as ‘system steward’. This involves overarching responsibility for the monitoring, planning and management of resources in such a way as to support contracting out of social assistance services. Key activities include setting standards and outcomes, monitoring system performance, identifying barriers to and opportunities for beneficial change, and leading the wider debates required to achieve that change. (iii) There will be a need for training and capacity building at all levels both for public agencies involved in contracting out and for social organisations in order to facilitate contracting out. There is also likely to be a need for market development measures in many areas in order to develop genuine competition in the social services field. (iv) The PRC should adopt a phased approach to contracting out recognising the quite different socio-economic contexts which exists, and the different levels of experience in contracting out. Some cities (e.g., Guangzhou, Shanghai) have considerable experience of contracting out and of developing social markets. Others are at a much earlier phase in the development of markets in social services. These differences will mean that contracting out will need to be implemented in practice in a manner which reflects these different levels of development (even if the underlying legal rules are the same for all). Thus, for example, public authorities and social organisations in some areas will need much more extensive training and capacity building in order to facilitate contacting out. Of course, the experience of what has worked in specific Chinese cities and counties can be very beneficial to those areas at an earlier stage of development. (v) As part of market development, for those areas at an early stage of development, it may be appropriate initially to consider the use of tied grants rather than competitive tendering including price. This does not rule out a quasi-competitive process of assessment based on capacity to deliver the service. (vi) Conversely, in those areas with more extensive experience of contracting out, the public authorities should consider piloting performance-based contracts (if this is not already in place). (vii) Give the different levels of development, it would be useful to establish a forum for sharing experiences between different regions and

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municipalities and to facilitate areas at an earlier stage of development in drawing on good practices and accessing personnel who could provide training and capacity building. (viii) In terms of gender, the broader commissioning process should take into account gender-based needs and services (including using sex- disaggregated data in relation to population and population needs) and the procurement process should also have regard to the gender policies and practices of potential suppliers. (ix) Finally, during implementation of contracting out the authorities should consider the need to consult with the general public and service users and to protect the autonomy of social organisations.

IV. CONTRACTING OUT SOCIAL ASSISTANCE SERVICES IN AUSTRALIA AND IMPLICATIONS FOR THE PRC

30. In the 1970s, under the influence of the decline of the traditional welfare state model and the wave of new public management reform, social services provision in Australia gradually changed from government provision to marketization, contract outsourcing and other ways. The Government of Australia began to actively promote outsourcing social services, so as to improve the service quality, and reduce public expenditure as well as financial investment. After the 1980s and 1990s, government purchase of social services in Australia has been further developed, and a new type of government-society cooperation mode based on contract has been established. For many years, the content of government purchasing social services has become more abundant, the services provided have been more diversified, and the service quality and performance management have been highlighted.

31. Australia's national administrative systems are divided into three levels: federal, state (territory) and local. Due to different responsibilities, the focus of government purchasing social services is different at all levels. Among them, the federal government is mainly responsible for the purchase of services in employment, pension and medical care. The state (territory) government is responsible for the purchase of supplementary social services such as disability security, children protection, pre-school children's services and student vacation service. The local government is only responsible for the purchase of social services in a few aspects such as housing security and disaster compensation. In recent years, based on these experiences, the federal government of Australia has gradually implemented unified planning, purchase and supervision, and achieved good results.

32. At present, the federal government purchases social services mainly in the fields of employment, pension, disability security, and social assistance. Employment service is one of the first areas in Australia to explore outsourcing. The Government of Australia selects qualified employment service agencies through public bidding, signs 11

contracts with them and then provides funds. While for the employment service agencies, they need to recommend relatively stable jobs for job seekers, help them solve the job-hunting problems fundamentally, and provide them with services such as employment training, employment information and job docking according to their actual demands. Government purchase of employment services has contributed to the lowering of the unemployment rate in Australia.

33. Elderly care services. Australian government invests a huge sum of money in elderly care every year, implementing three main programs: residential elderly care, domiciliary elderly care, and the Federal Home Support Plan. It entrusts qualified SOs or for-profit service institutions recognized by the Ministry of Health to provide care services for the elderly who live in institutions or at home. There are about 900 social organizations operating about 2,700 old age institutions, providing residential care services for 185,000 elderly people.

34. Disability security. The National Disability Insurance Scheme (NDIS) is implemented to provide comprehensive security services for the disabled under 65 and their families as well as nursing staff in Australia, which can meet the diversified survival and development needs of the disabled. The NDIS began to pilot in 2013 and is fully launched on July 2019, with an annual investment of about $22 billion. Through government purchase of professional services, it will provide various support services for 4.8 million disabled people and nursing staff, including the assessment of the reasonable needs of disabled individuals, the re-evaluation and situation feedback every three months, care and rehabilitation of disabled people, and services about work participation and social integration.

35. Social assistance. Australia carries out classified assistance for different target groups, and the qualification of beneficiaries and the release of funds are entrusted by the government to non-governmental departments (such as Centerlink) or SOs. Every year, after the federal government listing the financial budget according to the total needs of funds (including 3% payment to Centerlink), it signs a benefits release contract with the headquarters of Centerlink (contact center), who is responsible for the assistance for the people. In return, Centerlink has made three commitments to providing convenient and high-quality services at different stages of people's lives. The first is the "one site", which means they provide almost all social security, welfare projects and national health care services to the public in one step. The second, the "one employee" where every employee in Centerlink has received strict training and can help applicants to handle all social security projects and improve administrative efficiency. The third, the "one account" implying that Centerlink will set up a CRN for every applicant, which can be used by all social security projects, avoiding welfare superposition, and strengthening the planning and connection of all social security projects.

36. The purchase of social services is an important way for the Australian government to perform its duties, and also an important part of Australia’s public

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services. After decades of exploration, practice, reform and development, Australia has formed advanced development concept, complete legal and policy system, relatively mature operation mode and supervision mechanism in terms of government purchase of social services, accumulating some experiences to learn from.

37. The Australian government has always highlighted the concept of "human orientation" when purchasing social services. They prioritized meeting the needs of customers in policy design, service organization selection, service content determination, and service quality supervision, emphasized that the services provided should "value people’s needs, expectations, and experiences", and solicited opinions from the public in the entire process of service purchase. In the purchase of old age services, service institutions are required to assess the nursing needs and self-care ability of the applicants as an important basis for providing services and allocating government funds. In the purchase of employment services, they are required to divide job seekers into three categories based on their personal abilities and demands, providing basic online self-service, face-to-face support services or higher-level comprehensive services respectively. In the purchase of disability security, it is required to assess the reasonable demands and care objectives of the disabled in advance, so that the content, care mode and cost arrangement of the services can be determined. Besides, the Australian government also provides diverse social services for ethnic minorities and indigenous peoples with multicultural backgrounds.

38. Australia pays careful attention to the development of laws and regulations in the field of government purchase of social services and summarizes good experiences in practice into laws and policies, which are very useful to regulate and promote government purchase of social services. In Australia, the introduction of every social security and service policy is accompanied by a new law. The legal and regulatory system of social security and social services is based on the Social Security Act 1991. All laws are comprehensive and systematic, with strong operability. They define the responsibilities and obligations of the government and service providers. Some even specify the process of government purchasing social services, the selection of service agencies, service delivery methods as well as relevant regulatory measures, which provide policy basis for government purchasing social services in various fields. For example, the National Disability Insurance Scheme Act issued in 2013 defined the scope, content, operation mode and regulatory measures of the NDIS, providing an important guideline for the government to purchase services in the field of disability insurance. While in the process of government purchasing old age services, the bidding agencies have to obtain qualifications in accordance with the Old Age Services Law promulgated in 1997 to provide diversified services for the elderly.

39. The Australian government's purchase of social services works under a relatively complete operating mechanism including competitive bidding, contract signing, service pricing, government payment, performance evaluation, etc., which effectively guarantees the implementation and promotion of the government purchase of social services. First of all, the government strictly selects service providers targeting different types of services based on legal provisions and public demands. In the 13

bidding process, the financial statements, scale, education and specialization level of employees, number of employees, location, historical experience and other qualifications of the bidding agency are strictly researched to assess whether it is capable to provide relevant services. After the bidding, the government will also give feedback to the failing agencies to help them further improve their qualifications. Secondly, the Australian government attaches great importance to the quality and sustainability of the services provided by the agencies. In the bidding process, the agency with the lowest price is not always the winner. The price it set should not only be within the government's capacity but also can stimulate market vitality. Meanwhile, the prices of services provided by service agencies to consumers are set by specialized agencies and expert teams, taking factors such as efficiency and fairness into consideration, and regularly adjusted according to the market. Thirdly, in order to protect the rights and interests of service objects and strengthen the supervision of service quality, the government generally adopts the method of installment. In terms of employment services, the government generally pays the purchase of services in installments within 26 weeks after the employment of job seekers, in order to urge service agencies to recommend relatively long-term and stable jobs for job seekers, and to solve their employment problems fundamentally.

40. In order to improve the service quality and ensure the fulfillment of recipients’ needs, the Australian government has taken various measures to strictly supervise the whole process of the service provider before, during and after the event: (i) Regularly checking on implementation of the service contract. According to the requirements of the contract signed for the purchase of services, service providers have to submit financial statements and annual economic, financial and compliance statements to the government on a regular basis, so that the government can review their business status and inspect whether they have the ability to continue to provide services. Also, the government will formulate detailed and operable evaluation standards and conduct scientific evaluation on the contract implementation based on service types and characteristics. (ii) Bringing in the third sector to carry out monitoring and evaluation. For old age services, in order to improve the objectivity and effectiveness of supervision, the government usually employs professional institutions (such as Elderly Care Quality and Safety Committee) to evaluate the service quality of service providers and the satisfaction of the masses through spot check, secret visit, questionnaire and other ways, and then puts forward suggestions for service improvement. (iii) Strengthening the public supervision. The public can appeal or expose the service providers through letters, online complaints, hotlines, media or seeking help from members of parliament in their constituencies. Once the service provider is determined to be of low service quality and incapable to continue to provide services, the Australian government will terminate the contract in time, transfer the customers it serves to other qualified agencies, and even prohibit the serious ones from entering the service market. At the same time, the Australian government stipulates that service providers take the first

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responsibility for service quality, while the government is more responsible for supervision, which can also promote service providers to pay more attention to risk prevention and control, and constantly improve service quality and public satisfaction.

41. In Australia, the full development and the benign competition of service providers are important prerequisites for the promotion of government purchase of services. On the basis that service providers and the market have been well developed, in recent years, the Australian government still pays attention to the development of social service providers, especially all kinds of non-profit organizations. Firstly, a part of government’s financial budget is regularly disbursed for the demand survey of service objects and the construction of service facilities, providing them with survey results and necessary facilities to carry out services. Secondly, the government introduces relevant incentive policies to encourage non- profit organizations to actively participate in the government's purchase of social services. Thirdly, the government supports the development and growth of service agencies through tax reduction and exemption, helping them continuously improve efficiency and quality of services.

42. The Australian practice of social services purchasing provides valuable experiences for the PRC to improve the work of government purchase of social assistance services. Australia's experience and practice has demonstrated that complete regulations and policies are an important basis and strong guarantee to promote the government purchase of services. Although the Chinese government has promulgated some policy documents regarding government purchase of social assistance services, the legal framework of purchased social assistance services is still not sound. Australia's experiences and practices show that the establishment of scientific, standardized, and operable implementation procedures is the key to the government purchase of social services.

43. In the current policies and regulations of the PRC, the implementation procedures for purchasing services are very general, and with low operability and standardization, which makes it difficult to achieve ideal outcomes. So it is necessary for the PRC further to clarify the implementation procedures of purchasing services and to build a systematic and effective procedural system to guide the practice of purchasing services and providing a policy basis for purchasing services. A unified purchase process should be established with detailed provisions such as purchase method, bidding process and rules, contract management, performance supervision and financial management. Drawing on the experience of Australia, the PRC should strengthen the supervision and management of the government purchase of social assistance services, improve the supervision mechanism of evaluation before, during and after the event, and ensure that the purchase behavior is open, transparent, standardized and effective. The evaluation system should be improved.

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44. In Australia, development of contractors is quite mature. Service providers of different scales and natures are located in different regions, replacing the government in the provision of professional, diversified, and personalized services for vulnerable groups. In view of the fact that the PRC’s social organizations and government purchasing social services are underdeveloped, it is necessary for the PRC to pay much more attention to the cultivation and development of the contractors of government purchase of social assistance services.

V. GENDER-AWARE PROCUREMENT: OVERSEAS EXPERIENCES AND THEIR IMPLICATIONS FOR THE PRC

45. Social assistance is a key driving force to achieve the sustainable development goals of poverty eradication and gender equality. In order to effectively implement policies, public procurement policies and gender-aware procurement can play a role in precision assistance and planning.

46. Gender mainstreaming is a global strategy supported by the United Nations to promote women's rights and gender equality. The United Nations defines gender mainstreaming as "the process of assessing the implications for women and men of any planned action, including legislation, policies or programmes, in all areas and at all levels. It is a strategy for making women’s as well as men’s concerns and experiences an integral dimension of the design, implementation, monitoring and evaluation of policies and programmes in all political, economic and societal spheres so that women and men benefit equally and inequality is not perpetrated. The ultimate goal is to achieve gender equality. In order to ensure that both sexes can enjoy and benefit from the same public resources and opportunities, it is important to explore the application of gender mainstreaming in government policy making and procurement practices in general, and in government purchase of social assistance services in particular. The practices of gender aware procurement in contracting out social services in UK and USA and in two Chinese societies can provide some references for the PRC.

A. Gender-equality and commissioning and procurement in the UK

47. The first practice to be described is considering gender-issues in commissioning and procuring social services in the UK. Commissioning is a set of service delivery processes which involve consultation, needs assessment and service planning and design. Commissioning is the process which takes place prior to procurement and involves identifying the need for services and deciding, having available resources, how such services can best be provided.

48. The legal basis for this practice is S. 149 of the Equality Act, 2010. This provides for what is known as the Public Sector Equality Duty (PSED). In line with the PSED, when making decisions (and in its other day-to-day activities) a public organization must consciously consider the need to eliminate discrimination, and

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advance equality of opportunity, and foster good relations. The PSED applies to the commissioning process and means, for example, that local governments must have regard to gender issues and considered gender data in assessing needs. As one example, Devon County Council has produced a guide for commissioners of services on how to achieve equality. The Guide gives an example of commissioning services for social care.

49. First, as part of the commissioning process, the council will carry out a needs assessment. Population/service user profiles should include a description about each of the protected characteristics (including gender) as well as other relevant factors such as socio-economic characteristics, prevalence of health conditions, well-being etc. The needs assessment process will inform council’s assessment of the demand for services. This will generally require gender-disaggregated data as to the target groups.

50. Second, analysis of the supply of services (the market) should consider to what extent the needs of groups including on gender grounds are being met as well as human rights aspects such as dignity, choice, privacy, and control. Third, in developing a strategy to respond to need, the council will have regard to the PSED to eliminate discrimination, and advance equality. Fourth, the Council will engage further in stakeholder engagement in order to test its initial findings. Finally, when a decision is being made by the council, the PSED must be drawn to the attention of decision makers.

51. The Guide sets out how local government should ensure that they comply with the PSED at all stages of the procurement process (See Box 1) and also suggest that as part of the assessment of tenders, local governments should (where appropriate) ask for evidence of the suppliers’ compliance with gender equality rules, e.g., equal treatment of its employees.

Box 1 How local governments comply with all stages of the procurement process 1) Equality and procurement strategy - It encourages local governments to ensure that their procurement strategy sets out how the equality duty will be addressed. 2) By considering equality issues in identifying need and building a business case (prior to tendering). 3) Assessing if equality issues are a core requirement of the contract, e.g. in the case of services for women, gender issues are clearly central to the project. 4) Assessing if there are additional equality outcomes which would add value to the contract. 5) Ensuring that (where relevant) equality issues are addressed in the terms of the contract, e.g. specifying gender outcomes such as providing services to one gender who are less likely to access services. 6) Specifying positive action (i.e. measures to improve equality), e.g. to encourage women to access services. 17

7) Specifying workforce requirements, e.g. providing gender-sensitive training; codes of conduct for staff behaviour. 8) Monitoring obligations in the contract, e.g. equality surveys of people who use services.

B. Gender discrimination and contracting in the USA

52. The second practice to be described is the prevention of gender discrimination in contracting of social services in the USA. This case study looks at how this is done in one state: Colorado under the ‘Colorado Works’ program. Colorado Works is Colorado’s Temporary Assistance for Needy Families (TANF) program that provides public assistance to families in need. The Colorado Works program is designed to assist customers in becoming self-sufficient by strengthening the economic and social stability of families. The basis for the operation of the Colorado Works program is set out in Regulations (secondary legislation) adopted by the State of Colorado. The Colorado Works program is administered by the county government in the state. The state of Colorado is divided into 64 counties with populations which range from a few hundred people up to over half a million. In Colorado, counties are considered as a subdivision of state government existing to administer state programs at a local level.

53. In particular, the regulations provide that the county department must assure that other agencies, persons, contractors, and other entities with which it does business are in compliance with the prohibition of discrimination requirements on a continuing basis. The county department staff is, in the first instance, responsible for being aware of any discriminatory activity of other agencies and for notifying the State Department of Human Services concerning the situation. The Colorado State Department of Human Services, through its various contacts with agencies, persons, and referral sources, is also required to be continuously alert to discriminatory activity and to take appropriate action to assure compliance. If corrective action is not taken, the State Department will notify the agency of termination of payments and association regarding recipients or applicants. The county department, on notification by the State Department, is also required to terminate payments to or association with any agency being used which has been found to continue discriminatory activity regarding applicants or recipients. To implement these requirements, the county departments include provisions in contracts with other agencies. For example, the county departments include provisions in their contracts with agencies setting out the legal provisions which outlaw discrimination and provide that the agency must take prompt corrective action to address any breach of the agreement. An individual who believes he or she is being discriminated against may file a complaint with the county department, the State Department, or directly with the federal government. If it is found that a county department practice or action is discriminatory, the State Department shall initiate a corrective action to assure that all discriminatory practices are permanently terminated.

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Box 2: The specific section on Protection against Discrimination in the Regulations (secondary legislation) adopted by the State of Colorado A. County departments are to administer assistance programs in such a manner that no person will, on the basis of race, colour, gender, age, religious belief, political affiliation, national origin, or physical or mental disability, be excluded from participation, be denied any aid, care, services, or other benefits of, or be otherwise subjected to discrimination in such program. B. The county department shall not, directly or through contractual or other arrangements, on the grounds of race, colour, gender, age, religious belief, political affiliation, national origin, or disability: 1. Provide any aid, care, services, or other benefits to an individual which is different, or is provided in a different manner, from that provided to others; 2. Subject an individual to segregation barriers or separate treatment in any manner related to access to or receipt of assistance, care services, or other benefits; 3. Restrict an individual in any way in the enjoyment or any advantage or privilege enjoyed by others receiving aid, care, services, or other benefits provided under assistance programs; 4. Treat an individual differently from others in determining whether he or she satisfies any eligibility or other requirements or conditions which individuals must meet in order to receive aid, care, services, or other benefits provided under assistance programs; 5. Deny an individual an opportunity to participate in programs of assistance through the provision of services or otherwise afford him or her an opportunity to do so which is different from that afforded others under programs of assistance. 6. Deny a person the opportunity to participate as a member of a planning or advisory body that is an integral part of the program.

C. Gender Impact Assessment in Taipei,China

54. The third practice to be described is the use of gender impact assessment in policy plan in Taipei,China. Since 2005, Taipei,China Executive Yuan launched three phases of 4-year promotion of gender mainstreaming in public policy formulation. The strategy of using gender mainstreaming tools were utilized namely as gender statistics, gender budget, gender impact assessment, gender analysis and gender awareness training. Gender Impact Assessment was introduced during the phase 2010–2013. It is required that before major medium and long-term individual public plans and bills are submitted to the Executive Yuan for review, gender impact assessment shall be conducted with a checklist completed.

55. The major content of the Gender Impact Checklist includes using gender statistics and gender analysis, analyzing quantifiable or potential phenomenon of gender inequality during the process of policy planning and evaluation. It is required to engage external experts or scholars in gender equality with procedural participation. 19

The Gender Impact Checklist guides responsible governmental units to fully assess the enforcement results of policy in order to prevent or to improve the social phenomenon of gender inequalities. The responsible governmental department is required to conduct a self-review on the gender analysis of the policy plan, then seeks input from gender consultant(s), or submits the operation plans to the Gender Equality Task Forces of the departments. With the aid of an external Gender Expert, the expert reviews three major issues: (i) suitability of gender participation in due process; (ii) the suitability of gender issues in relation to the policy plan from gender statistics and gender analysis; and (iii) the suitability of the essence of the policy plan to gender equality. This practice uses external professional assistance and monitoring and resulted in incremental improvements. To achieve gender aware procurement requires a gender sensitive mindset when analyzing needs of the social assistance population. Designing and using proper working tools is a good strategy to facilitate civil affair officials to comply with and to improve gender awareness in planning, implementing and evaluation steps.

Box 3: Childcare Subsidy for Non-Working Parents in Taipei,China

In 2012 Ministry of Health and Welfare of Taipei,China launched a new scheme to provide a monetary subsidy for unemployed or not-available-to-work families for childcare for 0-2 year-olds. This new public measure aimed to help economic and socially vulnerable families reduce their financial burden, to strengthen their self- reliance, competence and family functioning. The Gender Impact Assessment (GIA) was applied and resulted in sharpening the subsidy plan’s gender equality as well as to correcting confusions of the officers. For example: The officer wrongly set the subsidy for mothers or female guardians because they are the main caregivers of 0- 2 children. With the aid of GIA, the plan was modified to target non-sex-specific beneficiaries to encourage both men and women (parents or guardians) to take up the caring role and duty.

D. Gender Mainstreaming Checklist in Hong Kong, China

56. The fourth practice to be described is the use of a gender mainstream checklist in policy formulation in Hong Kong, China. In 1996 the United Nations Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) extended to Hong Kong, China. The government set up a Women’s Commission in 2002 which developed a gender mainstreaming checklist for governmental practices. Since 2005, all bureau and departments should refer to the gender mainstreaming checklist when formulating major policies and projects.

57. The checklist practice is implemented in the four stages of the policy system, namely design, implementation, inspection, and assessment/review. In the design stage, it is required to review whether there is a consultation with gender research institutions or experts; in the implementation stage, it is necessary to review whether the education or publicity of the policy or project is passed on to women; whether the content can respond to women’s needs and what kinds of impacts it may have; in the monitoring stage, it needs to review the information sorted by gender; in the assessment/review stage, consultation and data management are carried out

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according to the planning indicators; and it is required to review whether women are empowered, or whether there is a negative impact on women.

58. The gender mainstreaming policy has shown a positive impact on the management of the government purchasing of social services. In February 2016, the Social Welfare Department (SWD) of Hong Kong, China launched a pilot scheme to establish a gender mainstreaming checklist for use by NGOs with a two-step management. The first step is to encourage social welfare service organizations to take gender awareness into account when developing operational plans about social services. Upon the award of the contract, the organization must complete and return the gender mainstreaming checklist for gender assessment that relating to service design and implementation. The second step is the social welfare service organization should fill the checklist again after the purchase project is completed with gender disaggregated data collection regarding monitoring, evaluation, and review of the service provision. Gender mainstreaming checklists completed have to be returned to the SWD office responsible for contract management, and which also forward the completed checklists to the Labor and Welfare Bureau’s focal point of gender mainstreaming policy. Such cycle of practicing gender aware procurement contributes to the governmental unit’s capability as well.

Box 4: Enhanced Home and Community Care Services for Elderly People

Most beneficiaries of enhanced home and community care services are elderly people who rely on social assistance. The SWD in Hong Kong, China purchased NGO direct care services and support services (e.g. provision of meals, home- making services, transportation, and escort services, carers support services, day care services, respite services, 24-hour emergency support etc.). With the gender mainstreaming checklist practice, the contracted NGOs are able to compile sex- disaggregated data for the collection of performance indicators and for benchmarking reports. These practices enabled NGOs to improve future service plan with gender sensitivity to address needs of women service users as well as their female carers.

59. The above-mentioned cases show that incorporating gender awareness in service-purchasing contracts can assist the achievement of social goals. A sex- disaggregated data management system is the basis for incorporating a gender perspective into the procurement of social assistance services. It can help civil affairs staff, when they are analyzing present situations, to collect and analyze the data and figures classified by gender in systematic and scientific approaches, in order to ensure that procurement content and management practices are not based on false assumptions and stereotypes.

60. The use of gender statistics can improve social assistance measures and service planning more accurately. By collecting and analyzing the demand differences between male and female recipients, it can analyze whether there are differences in the improvement of living conditions between male and female after service intervention. Through the design, implementation, monitoring and review of effective social assistance services, female social assistance recipients can obtain appropriate 21

services, acquire appropriate skills, or integrate into society, so as to reduce the risk of female poor population being isolated from society. Moreover, the implementation of gender-aware procurement will ensure that social organizations benefit from the supply chain of the project, acquire knowledge about gender-aware service design, improve their management system, and achieve the goal of this report which is guiding social organization to participate, develop and supply social services effectively.

61. In order to design appropriate guidelines to improve the gender responsiveness in the procurement of social assistance service in the PRC, it is important to embed procurement designs with gender awareness in four purchasing stages and distribute them throughout the purchase process (see Table 2).

Table 2:Gender Awareness in Procurement Cycle

Planning for Example of Gender Example of Gender purchase Aware Indicators for Aware Indicators for Administration- Service-oriented oriented tasks tasks Establish an information Categorizing the Collecting sex- management profile by needs of service Preparing and disaggregated having the categories recipients according to researching data and based on sex- gender differences statistics disaggregated statistics Increasing the Social integration Designing the proportion of women project schedules and Planning and achievement beneficiaries in the total community activities to approval indicators of population of service consider the services recipients by public convenience of emergency assistance women participants

Organizational management measures cover Publishing and Selecting gender awareness, or service programs have reviewing contractors service indicators setting the changes of female ability/capacity. Comparing the changes Deciding the ratio of Arranging feedbacks from Purchasing and in sex-disaggregated evaluation female service evaluating statistics by evaluating activities procedure analysis recipients to total feedback

VI. NATIONAL EXPERIENCES OF CONTRACTING SOCIAL ASSISTANCE SERVICES IN THE PRC

A. National case studies

62. The consultant team prepared 12 case studies in the PRC, intentionally selected from the eastern, central and western parts of the country (Table 3). These

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cases revealed four overarching characteristics of local government reforms in outsourcing social assistance services in the PRC.

Table 3: National Cases Studies

Service Contracted National Cases purchaser/contracting service providers agency

Outsourcing of social Guangdong Jing assistance Social Assistance Division, Wei Social performance Case 1 Department of Civil Affairs, Development assessment services Guangdong Province Research and in Guangdong Service Centre Province

Outsourcing of Guangzhou Pu Ai Integrated Social Dongshan Street Office, Yuexiu Case 2 Social Work Service Services for Families District, Guangzhou City Centre in Guangzhou

Outsourcing of social Foshan City Joint work services for low- Social Work Committee/Social Creation Social Case 3 income families in Work Bureau, Dali Town, Work Service Nanhai District, Nanhai District, Foshan City Center Foshan

Outsourcing of Social Civil Affairs and Human Shunde District Assistance Means- Resources Social Security Case 4 Social Workers testing in Shunde Bureau of Shunde District, Association District, Foshan Foshan City

Foshan Shunde Civil Affairs and Human District Social Shunde District Resources Social Security Case 5 Assistance Social Service Bureau of Shunde District, Administrative Service Association Foshan City Outsourcing

Outsourcing the Zhongshan City Operation of Civil Affairs Bureau, Charity Federation, Case 6 Zhongshan Medical Zhongshan City Perfect Fraternity Assistance Center Charity Fund

Outsourcing of Social Dongguan City Assistance Means- Civil Affairs Bureau, Dongguan Case 7 Mass Social Work testing in Dongguan City Service Centre City

Outsourcing of Social Hubei Huajia Assistance Means- Social Assistance Bureau of Case 8 Information testing in Xiaogan City, Xiaonan District, Xiaogan City, Consulting Co., Ltd Xiaonan District

Civil Affairs Bureau of Jiangxia Case 9 Outsourcing of Social Hubei New Assistance Means- District, Wuhan City Viewpoint Market 23

Service Contracted National Cases purchaser/contracting service providers agency testing in Jiangan Research and District, Wuhan City Consulting Co., Ltd

Outsourcing of Social Civil Affairs Bureau of Hubei True Heart Assistance Means- Case 10 Tongcheng County, Xianning Social Service Co., testing in Tongcheng City ltd County, Xianning City

China People's Outsourcing of Social Health Insurance Case 11 Assistance Means- Civil Affairs Bureau, Xi'an City Company Limited, testing in Xi'an Xi'an Branch

Outsourcing of social Chengdu Tongxing assistance Civil Affairs Bureau of Pixi Case 12 Social Work Service administrative services District, Chengdu City Centre in Chengdu

63. First, facing the accountability pressure, local governments prefer to purchase administration-oriented tasks of social assistance services. At present, most local governments prefer to outsource administration-oriented tasks and have no strong incentive to actively develop outsourcing of service-oriented tasks. As a result, the development of services for social assistance recipients is lagging behind, and the needs and risks of the vulnerable groups in terms of long-term care, childcare and social work services are not effectively addressed by the strategy of government purchase of services. Although satisfying the social service needs of vulnerable groups has always been an important policy objective of the MOCA, local governments do not have strong incentives to promote outsourcing of services for the social assistance recipients as the pressure of administrative accountability is not so big. In addition, the anti-corruption campaign launched in the poverty governance sector by the central government further prompted the local governments to direct much more attention to reduce mistargeting of social assistance recipients and increase the implementation efficiency of social assistance policy. As a result, local governments have invested much more financial and human resources in improving the targeting efficiency of social assistance. Also, the outsourcing policies promoted by the MOCA are mainly aimed at addressing the shortage of human resources for local governments in implementing Dibao scheme.

64. Second, due to the lack of a mature market and supply structures, social organizations do not have a competitive advantage in social assistance service outsourcing. In the 21st century, due to the rapid population ageing, labor market segregation and work-family imbalances, local governments, especially those in the developed regions, have invested a lot of resources in social services. In doing so, more service-oriented social organizations, especially social work organizations have been cultivated through the means of government purchase of social services. In this way, more social organizations can be involved in social services delivering. These

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financial inputs and policy support have indeed contributed effectively to the development of social organizations and the prosperity of the market supply of social services. However, the development of social organizations is not equal in the PRC due to the huge size of the country. Compared with the developed eastern region, the development of social organizations in central and western region of the PRC is very slow. In most cities in the central and western regions, the number of social organizations is small, and capable social organizations which can participate in service outsourcing are scarce. The underdevelopment of social organizations in the inland can attribute to the poor financial capacity of the local governments. Due to the lack of financial resources, it is not easy for the local governments in the central and western regions to employ the means of contracted service to foster social organizations. As business organizations have more advantages in delivering administration-oriented social assistance services compared with the immature social organizations, they are more likely to win the competition and become service providers for local governments. So, it is understandable that commercial health insurance companies, human resources agencies, business consulting firms and information technology companies have become the key providers in the outsourcing service market.

65. Third, local governments prefer ‘human resources placement’ rather than social service outsourcing (i.e. the purchase of staff rather than services). For a long time, local civil affairs sectors have suffered from the shortage of financial and human resources. Facing the increasing needs of social assistance services, local governments as well as their civil affairs branches have been under great pressure to enhance their services capacity. The introduction of social service outsourcing has opened an important policy window for them to strengthen their administrative capacity. Though social assistance service outsourcing covers two basic categories of tasks, civil affairs branches tended to outsource administration-oriented tasks. In the process of doing so, social assistance outsourcing has been carried out as human resource placement. When choosing social organizations as service providers, more and more local governments tend to adopt human resource placement. That is to say, the social organizations chosen as service providers have not provided social services or administrative services. Instead, they function as a labor placement agency and dispatch staff to the civil affairs departments. This kind of human resources placement was carried out in the form of purchase services from social organizations. In this situation, the dispatched staff work in the local government's social assistance positions, and they need to abide by the codes of conduct and work ethics of government departments. Although labor placement is not a real service outsourcing, it is helpful for the civil affairs departments as they are not allowed to increase staff even they have budget to do it. However, this practice is not good for social organizations to enhance their service capacity and maintain organizational autonomy. In a typical social service outsourcing model, social organizations and their employees should perform contracts independently and make decisions based on the professional ethics.

66. Local governments, motivated to outsource social assistance services to address the human resource shortages they face, do not fully recognize the value of professional social services. Therefore, it is important to make local governments 25

aware of the value and advantages of social organizations in solving the current difficulties encountered in social assistance, otherwise they will not be able to effectively realize their professional value even if they are contracted to delivery social assistance services.

67. Fourth, most social assistance outsourcing contracts are designed with more emphasis on process accountability and less emphasis on outcome or performance accountability. This situation can be explained by the underdevelopment of social services in the PRC. That is to say, the policy of social service outsourcing in the PRC was introduced at the time when the development of social services was at its very beginning. Because of the lack of adequate experience and capacity, many local government civil affairs departments are unable to reasonably design service outsourcing contracts. In order to avoid blame, they tended to control the process of service outsourcing, but pay less attention to the performance management of outsourcing services. As a result, there are few contractual provisions for performance management and performance appraisal; and performance-based payment and accountability measures are rare. At the same time, much of the bargaining between purchasers and suppliers is based on the budgetary constraints faced by the government. Local government budgets for outsourcing social services are usually based on their financial capacity, rather than on the needs and risks faced by residents.

68. The case studies also exposed practical challenges for both the purchasers (civil affairs departments) and the providers (social organizations).For civil affairs departments and their staff, the challenges include the following: (i) In areas where social organizations are slow to develop, it is difficult to identify the organizations that can provide the required services, so it is necessary to appropriately relax the qualification requirements or to carry out promotion across regions. (ii) In areas where social organizations are flourishing, civil affairs departments is required to invest resources in training and offering guidance because social organizations are not familiar with social assistance affairs and their operations in reality. (iii) Due to the lack of pricing reference, it is difficult to estimate the professional work resources of contracting newly developed services, especially service-oriented tasks. At the present stage, the types of services contracted by civil affairs departments are mainly administrative affairs, which are used to assist the functions of civil affairs departments. The service-oriented projects that will be implemented in the future will more involve in the families of service recipients or require more social skills, or encounter with more difficulties in designing service-oriented tasks. (iv) The civil affairs departments which below the municipal level have fewer project quotas, fewer funds, and a short cycle in their average annual procurement. Their purchasing means strictly follow the procurement model, which create a large administrative cost. At the

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same time, the sustainable development of the project has also been affected, reducing the efficiency of financial capitals uses. (v) There is not enough experience in establishing an evaluation mechanism for services purchasing. The evaluation approaches are mainly based on the completion of administration-oriented tasks and the satisfaction level of civil affairs departments. Some projects prioritize measuring the satisfaction level of services recipients, without neither evaluating the performance of civil affairs departments purchase management, nor assessing the overall performance and capability of social organizations. (vi) So far, the social evaluation of procurement projects focuses on the satisfaction level of services recipients; however, the detailed evaluation indicators are not apparent, and the present standing still remains at the subjective reflection stage. The evaluation project also lacks the performance evaluation from multi-dimensions; thereby it is impossible to summarize the social benefits of resources procurement. (vii) Lack of sufficient knowledge to design plans for procurement with a management foresight. The team responsible for social assistance is not familiar with the current situations of social organizations, so it is necessary to contact the specialized team within civil affairs departments to understand the actual operation details.

69. Social organizations face the following challenges: (i) In the process of preparing the bidding application, the provision of qualification materials requires too much human and material resource and occupies the resources which should be used for designing a service program. (ii) They are unfamiliar with the actual operational procedures of social assistance and the staff need to be retrained. Social assistance services are newly developed businesses and require to be equipped with new skills; as a result, more funding is invested by institutions than their returns. (iii) After signing the contract, the flow of labor will affect the level of human resources, so that social organizations have to invest at a high cost to maintain operations. (iv) The social assistance services purchased, at the present stage, are mainly administrative affairs with a short time cycle. The types and quantities of services to be purchased in the future are still undetermined and need to be further understood. To develop more mature social organizations will require more time for observation and strategic analysis to decide whether to participate in the purchase of services. (v) During the implementation of social assistance services in reality, community/street agencies are required to cooperate administratively, and their comments have to be included in project evaluations. However, these related institutions do not have any relevant identification in the contract of purchase. 27

(vi) Due to unfair contract inquiry and consultation, social organizations are in a passive position. (vii) Inadequate or unstable financial resources. (viii) Vague benchmark: both task and evaluation indicators are based on the number of services completions. (ix) The performance evaluation by the third-party also rarely measures the specific social function or life improvement of the service recipients, which cannot reflect the service professionalism of social organizations.

70. To address these challenges, the following five areas need to be improved: (i) Specifications, responsibilities and performance of service purchase; (ii) Coordination, relationships and roles of service implementation; (iii) Recognition of the mutual interaction between the motivation of SOs to participate in services purchasing and the strategic analysis of the investment about social assistance procurement and organizational development; (iv) Development of capacity for civil affairs departments which are responsible for social assistance for new service business, especially to establish a stable supply market; and (v) Management system strengthening for civil affairs departments.

B. National experiences: questionnaire survey

71. The consultant team surveyed 83 officials in a questionnaire survey conducted in 2019. The respondents came from the provincial (45), municipal (9) and district/county (29) civil affairs departments respectively, accounting for 54.2%, 10.9% and 34.9% of the total respondents. Among the respondents, 50 had the experience of purchasing services from social organizations, accounting for 60.2% of the sample, while the remaining 33 respondents had never participated in any purchasing activities. Judging from the starting time of government purchase of social assistance services, more than half of civil affairs departments involved (49) started to purchase social assistance services by social organizations from 2017, accounting for 59% of the total number of respondents.

72. In order to better understand the overall situation of government’s participation in the purchase of social assistance service, the statistics will be analyzed in three phases: before, during and after the purchase. Based on the descriptive analysis of the questionnaire data, we will further draw several main conclusions.

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1. Before the implementation of service outsourcing

73. In short, the analysis in this section is mainly related to the government's preparation for purchase of services, such as purchase motivation, purchase targets, public demand identification, information release channels, personnel training, etc. (i) Purchase motivation. According to the data, among the forces driving the government to purchase services, 38 respondents indicated that policy support is the main driving force, accounting for 45.8% of the respondents, which indicated that policy support has become the most important driving factor for the government to purchase services. The government’s limited ability is ranked second with a number of 23, accounting for 27.7%. Besides, the number of considering superior requirements (11) and social organization’s professional advantages (11) is 22 in total, which accounted for the remaining 26.5%. (ii) Purchase purpose. From the perspective of the purpose of purchasing services, improving the quality of public services has become the most important objective of the government, with 49 respondents hold this view, accounting for 59%. Another 30 respondents, which accounted for 36.1%, chose the option of transforming government functions. The consideration of streamlining government size and cost saving is less often seen as the main purpose of service purchasing, with only 4 people expressed their support. (iii) Public needs identification. In terms of identifying the public's needs for services, the survey results showed that 39 respondents believed that public needs were mainly understood in the process of government services, accounting for 47% of the total number of respondents. However, the choice of investigation by the department and entrusted to a third party is 22 and 17, accounting for 26.5% and 20.5% respectively. Also, 5 respondents also said the sector had no special survey to identify public needs. (iv) Purchase information release. Usually, in order to attract the participation of social organization, the government needs some specific channels to spread purchase information. According to the results of the survey, 49 of the interviewers said that their sector would release purchase information through the government bidding website, accounting for 59% of the total number. 22 and 14 departments chose to release purchase information through the department's official website and selective notification channels, accounting for 26.5% and 16.9% respectively. In addition, another 30 units will publish information through more diversified means. (v) Purchase goals. It is especially important for the implementation of government purchase behavior to make clear the purchase target. According to the statistics, 26 sectors are very clear about their purchase target, accounting for 31.33% of the total number. The number of relatively clear units is 45, accounting for 54.22%. However, 12 said they were vague about the purchase target, accounting for 14.5 percent of the total respondents. 29

(vi) Training methods. The results show that the government has diversified training methods to guide the staff before the implementation of the purchase behavior. The main training methods are internal mobilization and government purchase related training when participating in other trainings: 39 and 33 units respectively chose the above methods, accounting for 46.9% and 39.8% respectively. There were 26 units, accounting for 31.3% of the total number, which specially participated in the training of legal knowledge relevant to government purchase of services. Of course, 13 units (15.6%) did not have any relevant training.

2. During the implementation of service outsourcing

74. This part mainly discusses the behavior of the government purchase of services, such as the modes and types of purchase, the social entity of the participating units to purchase, the target requirements, etc. (i) Types of contracted services. In this survey, from the perspective of the contents of services contracted out, the top three services are inspecting the households enjoying the minimum living allowances (低 保户), investigating the situation of the people who are suffering special hardship (特困供养人员), and promoting policy publicity. 57, 53 and 40 units purchased these services, accounting for 68.7%, 63.9% and 48.2% of the total units of the respondents. Following the top three are services of evaluating the outsourced services (23), taking care of the people who need nursing services (22), which account for 27.7% and 26.5% respectively. Other services include identifying the people who need medical assistance, providing assistance to people who need medical treatment, providing psychological counseling for the welfare recipients, helping welfare recipients link to other resources. Also, several respondents stated that their departments (7) did not purchase any services. (ii) Purchase methods. In terms of the way the government purchased services, 45, 29 and 20 respondents chose open tendering, competitive negotiation and direct entrustment, accounting for 54.2%, 34.9% and 24.1% respectively. And invited tendering and application share the fourth position with 19 people, accounting for 22.9%. 14 respondents chose a single- source procurement, accounting for 16.9% of total number. (iii) Social entity participation. According to the results of this survey, in the information release channels of government public bidding, 33 respondents indicated that more than 3 social entities often participated in government purchase, accounting for 39.8%. On the other hand, 34.9% (29 people) of the respondents said that no more than three social entities often participate in government purchase. The remaining 21 said they often had more than 5 and 10 social organizations, but the total was only 25.3%.

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(iv) Relationship between government and social organizations. When the government implemented the service purchase, in terms of the relationship between the two entities, 46 respondents choose the option of equal relationship, accounting for 55.4% of the total number of respondents. The relationship between the manager and the managed was supported by 27 people, accounting for 32.5%. In addition, 10 respondents said they were unclear or unsure of the relationship between the two. (v) Service standards. In terms of the service standards, according to the survey results, 53 respondents, accounting for 63.9% of the total number of respondents, indicated that the government had set certain standards for services purchased. There were also 25 respondents who said there were standards but not so clear, accounting for 30.1%. In addition, 5 respondents said their sector's standards were vague or non-existent. (vi) Purchase barriers. In response to the difficulties encountered by the government in purchasing services, 55 respondents, accounting for 66.3% of the total number of respondents, said they lacked experience in purchasing services. In addition, 44 people, 38 people and 39 people, accounting for 53.1%, 45.8% and 47% respectively, said they were short of funds, or found it difficult to supervise and hard to evaluate the purchase effect. In addition, 10 respondents said a lack of social organizations was a major difficulty.

3. After the implementation of service outsourcing

75. This section mainly discusses the work to be done after the purchase of services by the government, such as the evaluation of the impacts of the outsourced services on the improvement of the quality and efficiency of public services and the application of evaluation results, the analysis of the obstacles existed in government purchase of services, the improvement of public satisfaction, as well as evaluation of the competence of the service delivering organizations. (i) Supervision of the institutions. Among the diversified ways in which the government supervises the institutions, i.e. social organizations that provide the services, government departments regularly check or do periodic evaluation, and the institutions that undertake the services regularly report the information and the supervision of the audit department are ranked in the top three, with 56, 45, and 29 respondents supported this view respectively, accounting for 67.5%, 54.2% and 34.9%. 21 respondents said that the sector would use user complaint platform for supervision, accounting for 25.3%. In addition, 5 respondents said they were not clear about the way supervision was conducted or the lack of supervision in their work department. In the audit conducted by the government, 30 respondents and 15 respondents indicated that the government would audit the purchase by government audit departments and social audit institutions, accounting for 36.1% and 18.1% respectively. Of course, another 31

21 respondents said they did not conduct any audit, and 6 respondents said they would conduct other department evaluations. (ii) Services improvement. Government purchases have improved the quality and efficiency of public service delivery. The survey results show that 56 and 53 respondents, accounting for 67.4% and 63.8% of the respondents respectively, said that the improvement of the quality and efficiency of public service supply is pretty large. There were 15 respondents who had a very large improvement in service quality and improvement in supply efficiency, accounting for 18.1%. Besides, 12 and 14 respondents said government purchases did not significantly improve quality or efficiency. In addition, one other respondent said that service purchasing even reduced the efficiency of service supply. (iii) Public satisfaction. Based on the government’s standpoint, the survey results show that the number of respondents who believe that the government's purchase of services to improve public satisfaction is very large, relatively large, and has not improved significantly is 12, 46, and 11 people, accounting for the proportion of respondents14.5%, 55.4%, and 13.3% respectively. From the standpoint of the public, 15 and 52 respondents believed that the public was very satisfied and relatively satisfied with the government purchase of services, accounting for 18.1% and 62.7% of the total number of respondents. (iv) Success factors. In terms of the success factors behind services purchasing, according to the survey results, 38 respondents, accounting for 45.8% of the total number of respondents, think that national policy support enables the government to purchase services successfully. As for the financial support and public need, 27 and 13 respondents expressed their support, accounting for 32.5% and 15.7% respectively. The factors valued by leaders were supported by fewer respondents. (v) Application of evaluation results. With regard to the application of the government’s evaluation results on purchasing services, the survey results show that the number of respondents who indicated that the results would be used for the next year’s purchasing budget, the next year’s purchasing performance improvement, the next year’s selection of service provider and improvement of the internal management of the purchasing department were 37, 45, 48 and 29, accounting for 44.6%, 54.2%, 57.9% and 35% respectively. (vi) Project withdrawal. According to the survey results, 69 respondents said that they did not withdraw the outsourcing services, accounting for 83.1%, and the rest said they did. As for the reasons why the purchasing department decided to withdraw the outsourcing service, the quality of the service provided by the contractor was the most important factor, which was supported by 61 respondents, accounting for 73.5% of the total respondents. In addition, 15.7% of the respondents think that the reason is that the service users are not satisfied with the service.

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4. Five Main Conclusions

76. Through the descriptive analysis of the questionnaire data of social organizations participating in social assistance services, we can find that the government purchase of services by introducing the market mechanism and highlighting the competitive advantages has effectively promoted the efficiency and quality of public services. Of course, there is also a need to prepare better for the purchase behavior, cultivate the social organizations and emphasize the evaluation of the effectiveness of outsourced services.

77. First, government purchase of services can improve efficiency and quality of public service supply. Judging from the results of this survey, from the view of the government, more than half of the respondents agreed that impacts of contracting out services on the improvement of service efficiency or service quality is relatively great. And from the perspective of public experience, the attitudes towards the public sector purchase service satisfaction share the same level with public sector’s perception, which indicates that the government purchase service does have a significant driving effect on the efficiency and quality improvement of service supply.

78. Second, high-level policies have promoted the implementation of local government purchase of services and their success. From the point of time when local governments started to implement government purchase behavior, large-scale purchase behavior began in 2017, which is closely related to the policy push of the central government (see Section II of this report) indicating top-level support for the purchase of public services by the government. However, since this was a new approach, the local government adopted a wait-and-see attitude; and policy implementation from the central to the local level also took time. In December 2016, the Ministry of Finance and the MOCA adopted the "Guiding Opinions on Supporting the Development of Social Organizations through Government Purchase of Services", which further improved the policy support system for government purchase of social services. Therefore, it could be seen that in 2017 local governments began to implement large-scale service purchases, which is inseparable from the promotion of high-level policies. In addition, the survey of respondents also shows that the support of national policies is an important driving force of local government procurement services and an important reason for their success. Therefore, strengthening the top- level design, improving the existing policy support system for the government to purchase social services, and improving the continuity and institutionalization of the policy are of great practical significance for the implementation of the government purchase behavior.

79. Third, insufficient development of social organizations hinders their capacity to participate in social governance In this survey, although respondents said that most of the service items purchased by the government would not be withdrawn, there are still projects being recalled in reality. The main reason is that the service quality provided by the contractor does not meet the social requirements. That 33

is to say, the capability of social organizations is insufficient. In addition, the purchasing subject's evaluation on the competence of social organizations to undertake the outsourced services also proves that social organizations themselves lack enough competence. Although the absolute number of social organizations in the People’s Republic of China (PRC) is large at present, due to the institutional, capital, personnel composition and internal management ability, there is still a gap between the ability of social organizations to participate in social governance and the actual needs. Therefore, it is necessary for the government to strengthen its efforts to cultivate social organizations, supporting social organizations in terms of financial fund and preferential policies, and promote the enthusiasm and ability of social organizations to participate in the supply of public services.

80. Fourth, the post-implementation evaluation system for outsourced services needs to be strengthened. Clear purchase objectives, fund budget arrangement, evaluation index system, credit review of undertaking institutions, and determination of purchase procedures and other work are important elements in the preliminary preparation of government purchase of social services. According to the analysis of the survey results, the government's work is relatively complete in terms of clear objectives, qualification of service contractors, examination of credit system and purchase procedures. However, in comparison, the evaluation index system of purchasing services, the cost-benefit analysis of purchasing projects and other aspects of the work is slightly insufficient. This means that the government has a clear definition of the qualification access of front-end services, but it ignores the construction of the evaluation system in the middle and back-end, which is directly related to the smooth working of the government’s regulatory role, the evaluation of purchase effect, the improvement of purchase service and service object satisfaction. Therefore, while consolidating the construction of front-end work, the government should also enhance the construction of back-end evaluation system.

81. Fifth, the government faces greater uncertainty in purchasing services. The concept of government services purchasing is rooted in neoliberalism, which advocates the use of market mechanisms to improve the efficiency and improvement of public service supply. Although extensive practice from the international scope proves the positive role of government purchase of services, its development faces certain uncertainties as a relatively new approach in the PRC. The survey results show that the cost saving of public service supply by the government purchase of services is relatively limited, and the government is also faced with multiple obstacles such as insufficient funds and regulatory difficulties. In addition, when the government's purchase of services threatens the specific interests of department members, whether the government could continue to support the government's purchase of services faces greater uncertainty.

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C. National experiences: focus group discussions

82. Making use of the training session for officials from civil affairs departments of 22 provinces, which was convened from 7-9 August 2019 in Chengdu, Sichuan province, the consultant team conducted focus group interview with 76 participants (see Appendix 2). The 76 interviewees were divided into three focus groups. All interviewees in three focus groups proposed that the strong demands of "purchasing social assistance services from social forces, enhancing the abilities of civil affairs departments at different levels to deal with tasks, and meeting the needs of services recipients" should be satisfied.

83. The three focus groups revealed common difficulties in purchasing social assistance services from social organizations: (i) Before procurement. From the purchasers’ perspective, the special funds for procurement are insufficient while the number of services recipients is large. At the same time, the financial departments at all levels do not provide sufficient cooperation. From the contractors’ perspective, the number of county-level social organizations is deficient, and it’s impossible to cultivate new organizations in a short period. If carrying out cross-provincial purchase of services, the service provider is not familiar with the local situations. Besides, some members of social organizations do not acquire social work certificates. Most of them do not have enough work experiences relating to transaction- oriented tasks, while they also do not have the skills required for service-oriented tasks. (ii) During the procurement. From the purchasers’ perspective, the civil affairs departments lack the purchasing norms that can be abided by, especially in the purchase pricing. At the same time, the competitive negotiation and public bidding are expensive, difficult to operate and easy to violate disciplines. The members of the organization in the bidding document and the members who actually participate in the service work do not conform to each other. From the contractors’ perspective, the work contents of social organization members and primary-level personnel, to some extent, overlap and have interactions, which easily triggers contradictions and affects the progress of work. Meanwhile, the members of social organizations are highly mobile, so that they are prone to security and responsibility issues during service delivering. For example, if there is an error in verifying the eligibility of Dibao applicants, it is difficult to identify who should shoulder the responsibility. Social organizations members’ insufficient abilities to conduct social works have led to the necessity for civil affairs personnel to provide massive guidance and interventions in purchasing services. As a result, civil affairs personnel’s workload has been increased. (iii) After the procurement. From the purchaser’s perspective, they are concerned about the sustainability of the procurement expense and have difficulty to assess the level of effectiveness of the services provided by social organizations, especially the effectiveness of 35

personalized service tasks. From the contractor’s perspective, social organizations are concerned about the sustainability of procurement contracts, social workers' weak belonging character, and social workers’ lack of abilities to prepare assessment materials as well as to collect reimbursement materials.

84. Issues pointed out by several interviewees in the focus group included: (i) For the ethnic minority areas, they are short of bilingual service personnel and the staff who are familiar with the culture of the social assistance receivers. (ii) For the border areas of the PRC, they are sparsely populated while there is a smaller number of personnel for contracting social assistance. As a consequence, the tasks to purchase social services take a long time to be accomplished.

85. The focus group members’ suggestions included: (i) In terms of funds for purchasing services, we should increase funds and provide more support to poverty-stricken areas. The proportion of particular funds for procurement at all levels have to be clarified. The "One-For-One" measure (a developed area helps a poverty-stricken area) is recommended. (ii) In terms of the content of purchase, it is necessary to purchase a certain number of service positions; meanwhile, the boundaries of service- oriented tasks expense and transaction-oriented tasks expense should be broken. (iii) In terms of the coordination with social forces, the responsibilities and risks should be divided into civil affairs departments and social workers, and the target recipients of social services should be identified clearly. (iv) In terms of the process and assessment of contracting social assistance services, it is essential to obtain a set of standardized procedures which take into account local characteristics. (v) In terms of contractors, the procurement scope should be expanded and the "barriers to entry" for social organizations and social workers should be reduced. It is worth to increase the frequency and quality of social work training programs, and to consider introducing experienced retired staff from civil affairs departments to participate.

VII. PLANNING SOCIAL ASSISTANCE PROCUREMENT

86. Planning is the foundation of social assistance procurement. The four stages of planning include identifying procurement risks, identifying stakeholders, identifying purchase scope and difficulties, and the planning matrix for project-cycle procurement.

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A. Procurement Risk Management

87. Risk management is the basic factor in developing a service purchasing strategy, and the application is different depending on the purchasing method. Grassroots-level social assistance service is a new form of transferring functions in civil affairs departments. It is a public service management innovation to improve the efficiency of assistance service supply by activating social organizations to launch new services. Both innovation and procurement have high risks of policy execution for civil affairs departments. Therefore, it is necessary to refine the risk management mechanism in the regular procurement procedure to guarantee the innovative achievements of new assistance services.

88. There are two types of risk—strategic risk, and operational risk. Strategic risk refers to the environmental factors or social conditions that affect the procurement strategy, for example, policy changes, the maturity of the supply market, and the technical maturity of agencies. Operational risks include the professionalism of procurement implementation, contract execution failure or sub-standard quality, accidental injury, financial imbalance, etc.

89. The trend in public procurement policy development is to strengthen risk management rather than mitigating risks. The steps of basic risk management include: (i) Identify risks: To review completed procurement reports and evaluation reports to identify weakness in procurement implementation or administrative measures. The alternative method is to understand the feedback from agencies and the service users and establish a risk awareness of procurement projects. (ii) Assess risk: To quantify risk levels (high, medium, and low) and potential impact, to improve planning results of civil affairs department’s procurement of services. (iii) Risk ranking: To evaluate comprehensively the probability of risk occurrence, and the risk scoring system can assist civil affairs staff to optimize the procurement management strategy. (iv) Managing risk: To identify ways to mitigate risk, assign responsibility and monitor. For examples, to establish risk registration forms, assign personnel to record the occurred risk in the procurement process, etc.

90. The risk management trend of international public procurement is to establish a more well-rounded risk management system and achieve full-dimensional coverage to cope with the instability caused by innovative services. Four types of risks are common in the purchase of social assistance services, including: (i) Organizational System and Social Risks. Whether civil affairs departments have the capacity to accept and deal with new work sufficiently? Or whether their technical level is adequate to coordinate the complex relationships between administrative and supervision 37

departments in the organization? Among the social risks, society or relevant parties' acceptability of new contracted services is most essential. (ii) Market Risks. This risk originates from the rapidly growing demand for purchase that is catalysed by policy reforms. If new demand is carried out in a fragmented procurement model, a more robust supply market cannot be established, and the risks relating to demands will occur. Meanwhile, the problems emerged in supply markets (such as the failure of social organizations to mature), the lack of human resources, funds, and technology required for services, the un-achievable high level of requirements, all trigger high investment risk for social organizations and low willingness to respond, resulting in supply risk. (iii) Financial Risk. This risk involves cost control of both procurement and contractors. For example, over-expenditure implementation or the funding that not available on time. For social organizations, one of the financial risks in responding to procurement bidding is the unpredictable changes in the living conditions of the recipients, which need to increase the service input beyond the procurement contract. Similarly, if civil affairs departments and social organizations further expand procurement scale before they figure out a solution to fill the investment gap, financial risks will be increased. (iv) Technical Risk. This risk arises from the supply side and involves technical factors that make completing the contract impossible or leads to performance below standards (e.g., insufficient capacity, inappropriate professional intervention, lack of solution, etc.). Such types of risks run through all stages from implementation to acceptance. Although there is an increasing rise of professional social worker organizations in terms of volume, the existence of knowledge-gap about social assistance tasks is also an issue. The lack of bridging between civil affairs departments and social worker organizations will limit the civil affairs departments purchasing practice.

91. In the procurement cycle of new social assistance services, the most vital risk management opportunity is "demonstration and project approval in the preparation and planning stage", during which the above four risks must be identified and avoided. Special attention should be paid to the management of organizational systems and social risks, which that civil affairs departments can effectively control and reduce risks by establishing appropriate systems.

B. Project Planning Capacity in Contracting of Social Assistance

92. The existing consensus is that the purchase of social assistance services is results-oriented. Due to the complexity of the form of social benefits as well as the level and diversity of procedures, stakeholders and their levels of participation need to be accurately identified in order to increase the probability of successfully purchasing services. At the same time, risk factors must be identified. This section focuses on the

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logical methods of stakeholders and purchases in order to assist staff in civil affairs departments improving their basic skills of planning.

1. Undertake Stakeholder Analysis

93. When designing a plan for purchase, it is important to analyze the parties involved and their levels of involvement. Figure 1 outlines the parties involved in the implementation process in administration-oriented and service-oriented projects.

Figure 1:Relationship Among Stakeholders

94. The contracted services in administration-oriented tasks belong to auxiliary works, and most of the service users are civil affairs departments. For service-oriented tasks, the rescue target is the service user; their needs and involvement are easily overlooked. Similarly, agencies or governmental departments providing other assistance services are rarely mentioned in procurement codes. Therefore, the analysis of stakeholders is the basis for purchasing service planning.

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2. Assess Stakeholder Relevance

95. Table 4 can assist the major stakeholders, from a civil affairs department staff’s perspective of purchasing, to identify levels of interest and relevance with six types of related stakeholders.

Table 4:Matrix Analysis Chart of Stakeholders’ Relevance in Purchasing Project

Relationship Expected between the Stakeholders Benefits Characteristics level of success of project participation and the level of participation

1. Service recipients

2. Contractors

3. Partners of contractors

4. Street, neighbor and communities

5. Independent evaluation agency

6. Financial departments

96. Using Table 4 assists in outlining the levels of stakeholder interest and their relevance to the success of purchasing. (i) Identify service recipients (rescue targets), service producers (social organizations and their partners), service collaborators (community/street agencies), supervisors (financial departments) and independent evaluators. (ii) Analyze the roles (leading, assisting, supervising, etc.) and identify the driving forces (interest points) of stakeholders to drive service outcomes. (iii) Analyze the contributions of different stakeholders to the success of services procurement and identify as well as assign different tasks for the implementation of services. (iv) Enable civil affairs department staff to identify and plan for the level of participation of different stakeholders.

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3. Plan the Project Investment-Result Cycle

97. The success of governmental purchasing service requires a project framework to manage multiple resources and to achieve outcomes properly. Investments from multiple sources are necessary to achieve the implementation of projects. Civil affairs department purchasing services program should establish the invest - implementation – results logic, in order to increase efficiency so that public resources can fully play their roles.

98. The logical framework for the purchase of social assistance services applies the logical framework approach, also known as the logic model, which is often applied to establish social services and development projects. The logical framework for planning the purchase of services is shown in the following table (Table 5); civil affairs departments can conduct a comprehensive strategy design for the purchase of services. The vertical dimension is based on the purchase cycle: goals, inputs, outputs, and outcomes. The horizontal dimension is based on service achievement indicators and the required external conditions.

99. The logical framework tools can ensure that the goal-setting of services purchasing is consistent with the final outputs, reducing the bias or omission in the service implementation process, and enable varied stakeholders to have a common understanding and consensus.

Table 5: The Logic of Investment-Implement-Result of Purchasing Project

Objective Methods / The external Targets Examples verification indicators factors

Project goals Hierarchical Needs The needs, Policy sustainability, indicators of evaluation participation and budgets, approvals goals expression of of proposals service recipients

Investment Investments of Needs / Human resources Budgets & (resources) quantifiable objectivity & Contractors' proposals, human investment of contractors resources – human resources funds – time & its level;

Number of community collaborations & participation

Output Generated Supervisio The number and Contractors (activities) activities – n and process of implementation, number of evaluation/ service civil affairs people – time 41

Objective Methods / The external Targets Examples verification indicators factors

objectivity implementation department & feedback are reasonable; supervisions

The satisfaction level of the service recipients to the activity

Achievement Consequences Evaluation/ Service Implementation (Changes) – quantitative / objectivity Performance - records of qualitative & feedback service recipients' contractors, indicators level of assessment satisfaction about party/reviewers, services service recipients outcomes

Attitudinal and behavioral changes of service recipients

Management effects - cooperation and collaboration, contractors' performance

100. One of the conditions for the success of government purchasing service is to have sufficient planning capabilities, to know and to master the professional skills provided by service suppliers, to decide the path for implementing service purchase, and to set social benefit targets. The logical framework tool can perform the above functions.

C. Identify Challenges in Purchasing Tasks

101. One major challenge to civil affairs departments is the diversity of purchasing tasks. First, from the perspective of procurement management, the procurement of administration-oriented services is mainly designed according to the required task quantity, level and completion schedule. Objective and quantifiable standards exist in all stages of procurement scope, monitoring and acceptance. Second, the social assistance department is the beneficiary of the service, that is, the service recipient. Therefore, civil affairs department procurement staff can directly understand,

42

supervise and manage the service delivery offered by contractors, reducing the coordination complexity of the procurement process management.

102. Comparatively, there are more complex conditions in the procurement task of direct service recipients. Organization and implementation of services improve their social skills through helping service recipients, involving the intervention services of "people", "ability" and "social resources and relationships". Therefore, the development of service performance assessment requires the establishment of an achievement dimension which is available for rehabilitation training, behavioral intervention, psychological counselling, and other services.

103. The dimensions of achievement commonly used in social services include "individual – family – community". The achievement of services procurement project is closely related to the individual and may lead to changes in the community, such as volunteer services, community organizations and corporate donations. This is the dissemination of social services.

104. Personal achievements include: material conditions - knowledge - skills - attitudes, for example: improvement of living facilities, improvement of self-care ability, and access to social support networks, etc. One question is whether the achievement of services is the collection of an individual’s benefits in a particular dimension, or whether it is the collection of an individual’s multi-dimensional benefits? This question indicates the composite nature of social services.

105. The implementation of service-oriented tasks is multi-level. Apart from providing services directly, contractors also need to coordinate other units in the community, such as seeking guidance from the street or village committee, coordinating medical institutions or volunteer organizations, or mobilizing charity volunteers, so that the recipients can be provided with sustainable social support to integrate into society. The setting of service tasks is hierarchical; civil affairs department staff are required to adopt different approaches for procurement management and supervision. Civil affairs department staff who are responsible for purchasing services also need to have or draw on relevant management knowledge.

4. Planning Procurement Readiness

106. Project-based purchasing practices require new roles for civil affairs departments at local and subnational levels. Civil affairs department staff plays a major role in assessing the eligibility of service recipients, budget allocation of assistance funds and making relevant policies. Contracting out social assistant tasks implies role changes of taking up planning and managing procured contractors. Procurement managerial roles such as procurement planner, contract designer, tender and bidding 43

assessor, monitor of contractors and evaluation works, manifested an emerging new arena for civil affairs department staff.

107. The difficulties are related to the multi-level nature of procurement management and the complexity of expanding results to longer impacts. Table 6 is designed as a planning tool for civil affairs department staff to self-check capacity readiness.

Table 6:Self-Check Purchasing Readiness

Procurement of Procurement of Service- Administration-oriented tasks oriented tasks

(0 – 10 levels of difficulty) (0 – 10 levels of difficulty)

Multi-level of

management

Complexity of service

achievement

Scale up and promotion of service achievement

108. Recognition of procurement readiness is differentiated between the two task types, namely administration-oriented tasks and service-oriented tasks, due to the different nature and content of duties. Civil affairs department staff need to understand the coverage of related management duties and levels of approval, the complexity of planned results, and the potential to promote results gained after the completion of the procurement. A 10-point rating scale is easier to facilitate consensus on the readiness among civil affairs department staff with the higher rating meaning higher difficulties in procurement planning. This line of examination complies with risk management principles in procurement project planning.

D. The Selection Strategy of Procurement Methods

109. The designing of purchasing strategies requires a combination of uniformity and flexibility to guarantee the purchased services meet the purchasing needs of civil affairs departments.

110. First consideration is about the maturity of the market. The availability of social organizations to participate and to ensure competition in procurement of social assistance services has a profound impact on the selection of procurement methods. Second and third factors relate to the financing factors that include departmental budget level, and the cost of purchase. Fourth factor is about the connectivity between

44

civil affairs department and the supply-side. The more knowledgeable about social organizations, the more potential to gain adequate reactions from the supply-side so as to have successful procurement respondents. A successful procurement should entail respondents’ ability to deliver. The fifth consideration in method selection is about the proposed task’s technicality level and the social organization’s ability of provision.

111. These considerations guide civil affairs staff to choose an approach to procurement that matches with local market development as well as departmental purchase needs.

VIII. GUIDELINES FOR THE PROCUREMENT MANAGEMENT OF SOCIAL ASSISTANCE SERVICES

112. Comprehensive procurement management is essential for effective service delivery. Guided by the principles of good practice on contracting social assistance and social services, a service-purchasing process consisting of 9 stages and 25 steps is proposed. These are based on eight principles: (i) Promoting results-oriented planning, with the benefits of the recipients of the services as a core; (ii) Understanding the needs of users of social assistance service and the relevant stakeholders; (iii) Setting clear goals to ensure the benefits of service procurement, the use of effective financial capital, functions transformation, and achieving good public governance; (iv) Increasing social organizations' level of participation and directly communicate with them, to ensure the quality of services; (v) Considering the principle of necessary capacity, to encourage capable social organizations to participate in the provision of services; (vi) Ensuring the transparency of the procuring process; (vii) Signing long-term contracts and take risk-sharing measures to guarantee the efficiency and results of service procurement; and (viii) Seeking feedback (including service users, communities and social organizations) to ensure service results and purchasing management performance.

113. These guidelines detail the 9 stages of contracting out, highlighting key areas of management focus at each stage.

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STAGE 1: Establish a work system for civil affairs departments to purchase services from social organizations

Step 1: Identify the social assistance tasks applicable to procurement a. Policies of the civil affairs departments; b. Content of work plans of the civil affairs departments.

Step 2: Make a checklist about the responsibilities related to service procurement for the social assistance departments

Step 3: Establish a more well-rounded mechanism a. Functional differentiation: decision v. implementation v. audit; b. Team management; c. Audit teams, subordinate to civil affairs department.

STAGE 2: Expand supply markets – cultivate contractors

Step 4: Design and divide the supply market a. Conduct market self-check and analysis (Market Scope Analysis) to improve the mastery of civil affairs staff of the social assistance services market; b. Build up registration records for social organizations, encouraging potential social assistance recipients to register and establish contacts with the civil affairs departments; c. Set up contractors' indicators of qualification.

STAGE 3: Purchase Planning: Purchase Proposal and Contract Terms

Step 5: Creating purchase proposals a. Decide purchase targets and the scopes of services; b. Budget plan; c. Suggestions about purchase methods; d. Expectations of production, achievements and the list of indicators; e. Time cycle;

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f. Evaluation of bidding and scoring scheme.

Step 6: Contract design a. Models of contracts; b. Procurement documents about other standards.

Step 7: Budget review and approval a. Review and approval of social assistance/ civil affairs departments; b. Review and approval of financial departments.

Figure 2 demonstrates step 5, creating purchase proposals, in detail. Adopting scientific and holistic principles, the design of procurement targets and scope requires systematic research on users' needs and plan of proposals related to procurement and purchasing demands. This step requires the implementation of relevant measures to ensure effective participation, including consultations with social organizations, experts, and social assistance targets, exchanging views.

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Figure 2: Creating Purchasing Proposals

STAGE 4: Tender /Negotiation /Consultation /Agreement

Step 8: Coordinate the trading centers or agencies of public resources (tendering/bidding company)

Step 9: Tender inquiries/consultations a. Introductions and discussions about service proposals and indicator; b. Eliminate the concerns from social organizations.

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Step 10: Emergency plan for the failure of bidding

An emergency plan should be prepared when designing a purchase proposal. When the bidding or other selected purchasing method does not receive sufficient response from qualified social organizations or does not receive any response, the emergency plan shall be initiated. The settings of the back-up plan can alter the purchasing approaches or adjust the pre-set purchasing service qualification. For example, after the failure of the public bidding, if the time does not allow to re-tender, the invited tendering or competitive negotiation procurement can be applied by means of the scheme specification.

STAGE 5: Examine and Appraise

Step 11: Evaluation of tending procedures, assessing criteria and the scoring scheme.

Three major assessments are needed in the proposal assessing stage: a. Qualifications of the respondents; b. Technical assessment/review on the proposal’s design, delivery and demand of resources; c. Pricing assessment/review to solicit cost-effectiveness, and quality of service provision.

Civil affairs department staff can establish evaluation standards and procedures in different ways, including the qualifications of the assessors, in accordance with official documents of government procurement specifications. If the purchased and reviewed projects/items are outside the centralized procurement catalogue, they shall be examined in accordance with the service achievement indicators, evaluation indicators and the qualification of contractors in the original plan.

The purchase of social assistance services is multi-dimensional, the civil affairs departments are required to have the ability to identify experts with knowledge of social assistance or social service management, in order to carry out provincial and departmental construction works:

1. To recommend talent from inter-disciplinary areas to the provincial database of assessment/review experts - it is conducive to promoting the purchase of social assistance and services. 49

2. Civil affairs departments should establish a database of experts for social assistance services, expand the scope, and invite social organizations and management talents to participate.

STAGE 6: Contract Award

Step 12: Award the contract and publish the information

Official publication on the websites of procurement platform, civil affairs departments and contractors is for the sake of keeping the information public and transparent.

Step 13: Negotiation

On the basis of the original purchase proposal approved by the review and examination, the negotiation or consultation on the modification or fine-tuning of contract contents shall be conducted in accordance with the latest specific situation. For example, based on the principles of equal consultation, it is possible to propose, or at the request of the social organization, jointly determine the mechanism of how contractors can withdraw from the purchase contract. If the funds for purchase do not meet the requirements during the negotiation, both parties will not be able to fulfil the terms. Alternatively, as the factors affecting the service demands were increasing, the service indicators should be revised through negotiations. It is worth to specify that service indicators cannot be significantly modified at this stage. Otherwise, these indicators cannot be regarded as parts of the original purchase proposal, and it also violates the principles of bidding procedures, competition, and fair evaluation.

STAGE 7: Contract management - Supervision

Step 14: Coordinate with social organizations and other stakeholders for effective service delivery

Step 15: Agree Indicator Variation

Step 16: Guide social organizations to collect statistics about service delivery and service quality analysis

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Step 17: Review examination methods - conduct regular work meetings - Fieldwork; - Conduct inspections of the beneficiaries of the services randomly.

Step 18: Investigate complaints and resolve them properly

Step 19: Cope with crisis

Crises are the result of poor risk management and require immediate resolution to control damage. Establishing a complaint and handling mechanism for purchasing services, including the publicity of the means to complain, the scope of not accepting complaints, and the system level as well as the process of complaints coping, can ensure the transparency and the communication of services purchasing. It is also a principle of implementing effective participation.

There are two types of the system level of complaints mechanisms: one is related to services and contractors; the other one is related to civil affairs departments. The processing mechanism consists of representatives from civil affairs department and at least one independent expert, playing a balancing role in the mechanism.

STAGE 8: Contract management - Acceptance and evaluation

Step 20: Accept social organizations’ self-assessments

Step 21: Organize and conduct evaluation/ third-party evaluation

Step 22: Accept evaluation reports

Civil affairs department staff need to pay attention to ensuring the effectiveness of the assessment/evaluation methods and the implementation of the principles of effective participation. First, civil affairs department staff should pay attention to the ‘voice’ of service users in the evaluation or third-party performance evaluation. In addition to seminars and questionnaires of satisfaction level, the written feedback can also be collected to increase the participation of service users. Second, it is vital to encourage and invite industry insiders and other social organizations, including companies in the 51

social needs survey, to provide professional assessment/evaluation, and to analyze the benefits of purchasing services from widening and in-depth perspectives.

STAGE 9: Department management - Taking full advantage of the service purchasing evaluations

Step 23: Social assistance departments attempt to adjust/revise the purchasing strategy

Step 24: Support social organizations (service providers) to transfer the assessment results into organizational knowledge (related service methods and techniques) for management

Step 25: Organize sharing sessions for social institutions which provided social assistance services

In practice, many public service procurement projects have omitted the tasks at this stage; making full use of the data about the evaluation of services procurement belongs to the feedback of service purchase, which plays a warning role for the future purchase of services by the civil affairs departments. This needs to be done within the department’s routine management system. For example, hold the department's purchasing service project meeting, sort out the findings and suggestions in different evaluation reports of services procurement, integrate the key points of purchasing strategy and management system, and promote the learning as well as improvement of department's purchase of social assistance services.

The methods to fulfil the 24th step may be that, the department plans to publish excellent annual cases/good practices of social organizations contracting social assistance services, or contact the departments which are responsible for the development of the social organizations, in order to jointly design the social organization capacity training program. Topics in the program can include how to create proposals for contracting social assistance services, for example.

IX. POLICY RECOMMENDATIONS FOR GOVERNMENT PURCHASE OF SOCIAL ASSISTANCE SERVICES IN THE PRC

114. Promoting the purchase of social services by government and improving the service capabilities of social assistance agencies at the grass-roots level are the basis for ensuring that social assistance can truly offer guarantees to people’s livelihood. At present, although local governments are actively promoting government purchase of

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social assistance services, from the national level, it is still at an early stage. Purchase of social assistance services by local governments is underexplored and there are still gaps in reaching the requirements of strengthening the capabilities of handling assistance and better serving the assistance targets. Therefore, it is important to summarize previous experiences in time and propose recommendations. The recommendations fall into three broad categories of improving policy and financing, improving social organizations’ performance, and improving local government capacity.

A. Increase Government Policy Support and Financial Investment

115. It is necessary to establish a comprehensive legal system of government purchasing services, formulate a highly operable policy basis, and improve the continuity of policy as well as institutionalization level. Improving and implementing supporting policies and standardizing the procedures and standards for purchasing social assistance services can provide a solid foundation and guarantee for governments at all levels to purchase as well as social organizations to undertake social assistance services.

116. Governments should increase financial investments, provide continuous and stable financial support for purchasing services, and conduct strict capital management. Local financial departments should support local civil affairs departments to arrange service purchase funds as a whole from two funds Social Assistance Work Funds and Special Funds for Social Assistance according to regulations, and gradually increase the government investments in social assistance services in combination with local needs. Local governments should prepare financial budgets based on market-based service prices. It is also needed to changes budgetary rules to expand the service market size and promote the development of the human resources market for social services, putting the purchase of social assistance services on a healthy development path. The consolidation and growth of service outsourcing budgets will attract more human resources to work in the social service market and more social organizations to participate in public service delivery.

117. In view of the large number of assistance recipients, poor service abilities and insufficient local financial capacities in central and western regions, especially in poverty-stricken regions, it’s suggested that the central government should directly provide special funds for these regions to purchase social assistance services. Fourth, it is necessary to break through the boundary between administration-oriented and service-oriented tasks in the use of funds, and to make full use of financial resources to purchase social assistance services.

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B. Cultivate Social Organizations to Improve Capacity to Deliver Social Assistance Services

118. According to the experiences of outsourcing social assistance services in the PRC, the shortage of social organizations and insufficient of their abilities are the key factors restricting the development of contracting services. To this end, local governments should change their minds and be innovative to provide greater space for the development of social organizations from a policy perspective, invest more resources, and establish a better platform. Specifically, local governments should invest more resources to cultivate social organizations engaging in social works and social services, attach importance to the training of social work professionals, and improve social organizations’ capacities to deliver social assistance services.

119. The annual short-term outsourcing service project should be gradually transformed into a multi-year long-term outsourcing plan. This does not require an increase in the government ’s social assistance service outsourcing budget, but only extends the service period in the contract. The increase in the duration of service outsourcing will provide social organizations with a more stable source of funding and development expectations. This will help social organizations solve human resource management issues such as employee turnover and brain drain. Where conditions permit, it is significant to conduct training activities for professional social workers on a regular basis, establish supporting systems for social organizations, improve the salaries and benefits for staff in social organizations, and stabilize core members. In view of the shortage of professional social workers in poverty-stricken areas and the difficulty in personnel training, it is suggested that the relevant departments can adopt preferential policies on the evaluation of social work talent in poverty-stricken areas, encouraging more people to obtain the qualification of social workers.

C. Improve Performance in Outsourcing of Social Assistance Services

120. It is necessary to foster social assistance service providers (especially social organizations) according to local conditions. Local government should support local social organizations to develop into influential service providers through organizational incubation and support measures, and help social organizations address key constraints in development. It is important for local government to establish the principle of competitive service markets, prevent the emergence of monopolistic market supply, reduce government dependence on a few large social organizations, and enhance the bargaining power and quality control ability of service purchasers.

121. Local governments should pay much more attention to improving the policy design for the outsourcing social assistance services. Civil affairs departments should further refine the project management and policy design of outsourcing administration- oriented tasks and services-oriented tasks of the social assistance. Based on the Sub- report on guidelines and indicators of the TA project, local civil affairs departments

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should issue an operational and standardized list of outsourced services and management guidelines, which may include every aspects of social assistance outsourcing.

122. The local government should improve the evaluation and supervision mechanism of government purchase of social assistance services. Supervision and evaluation are the cornerstones for the government purchase of high quality and efficient social assistance services. Based on the government’s demand for social assistance services, it is vital to clarify the bidding procedures, contract signing and fulfilment, information disclosure and other requirements, for the sake of establishing a scientific and standardized evaluation system. The third-party organizations should assess aspects such as project management, project output and effectiveness, financial management and innovation management through project reports, field observation, interviews. By understanding the actual performances of project implementation, they can promote projects to focus more on results during the implementation process. A diversified supervision system should be established. It is vital to clarify the supervision responsibilities of all parties involved in the government purchase of social assistance services, and actively encourage the government, third- party agencies, the public and the media to shoulder their supervision responsibilities. Meanwhile, the ways of supervision should be optimized, and the withdrawal as well as sanction mechanism to the contractors should be established, so that the implementation of supervision can be ensured.

123. Two final suggestions may enhance the feasibility of contracting out management for future procurement work in the social assistance area.

124. The first is to establish systematic planning and regulation of contracting social assistance services, including: (i) Establish an internal working group and clarify the functions for purchase; (ii) Establish a working mechanism that can work in collaboration with financial departments, civil affairs departments and social organizations; (iii) Promote communication with social organizations and social assistance targets to increase the level of accuracy about relevant targets’ demands and service planning information; (iv) Clearly define the evaluation indicators and expected results of the purchase of services; (v) Supervise and manage the progress and periodic performance of the entire purchase of services on one’s own initiative; (vi) Develop risk management policy, amendments and contingency plans; and 55

(vii) Improve the knowledge and ability of civil affairs department to purchase social assistance services.

125. The second is to cultivate the subnational and local management teams’ capabilities in social services-purchasing. Local government civil affairs departments should actively promote the connection between the purchase of social assistance services and social organizations and shift their role toward regulations and service management. In addition to learning and exploring in practice as well as learning and consulting with each other among departments, this report suggests that local governments and civil affairs departments should develop a more proactive and more extensive learning platform to conduct training activities.

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Appendix 1: Selected National Government Policy Documents

Policy Document Name Year

1. Guiding opinions of the General Office of the State Council on the government procurement social services 2013 from social forces

2. Guiding opinions of the Ministry of Civil Affairs and the Ministry of Finance on the government procurement social 2012 services

3. Social Organization Registration Management Regulation 1998

4. Disaster Relief and Donation Management Regulation 2007

5. Interim Regulation Government Procurement of Service 2012 from Social Organizations

6. Interim Regulation on Social Assistance 2014

7. Circular of the Ministry of Finance on the government 2014 procurement aging services

8. Guiding opinions on supporting professional forces of 2017 social work to participate in tackling poverty

9. Measures for the Management of Government 2014 Procurement by No-Bid Procurement Method

10. Procurement Index- Medical and social services for 2014 procurement of services

11. Measures for the Management of Tenders and Invitations to Bid in Government Procurement of Goods and Services 2017 （Amendment）

12. Guiding Opinions on Cultivating and Developing Social 2016 Organizations through Government Services Purchase.

13. Administrative Measures for Government Procurement 2004 Information Announcement 57

Appendix 2: Training Program and Focus Group Discussion Participants, Chengdu, August 2019.

Name Position Agency Province

祁小刚 Urban-Rural Minimum 1 Head Living Security Center, 湖北省 Hubei Qi xiaogang Wuhan

赖伟英 Principal Civil Affairs Bureau, 广东省 2 Lai weiying staff Shunde District, Foshan Guangdong

张明红 Civil Affairs Bureau, Pidu 3 Head 四川省 Sichuan Zhang minghong District, Chengdu

田建中 河北省 Department of Social 4 Head Tian jianzhong Assistance,Shijiazhuang Hebei

吴世峰 河北省 Deputy Department of Civil Affairs, 5 Wu shifeng director Kangbao Hebei

金华栋 河北省 Department of Civil Affairs, 6 Head Jin huadong Fuping Hebei

高 飞 山西省 Principal Department of Social 7 Gao fei staff Assistance, Taiyuan Shanxi

苏晓东 山西省 Center for basic living 8 Head Su xiaodong allowances, Tianzhen Shanxi

李新平 山西省 Deputy Department of Civil Affairs, 9 Li xinping director Jingle Shanxi

田智勇 Deputy Department of Social 内蒙古 Inner 10 Tian zhiyong director Assistance, ,Huhhot Mongolia

刘欢 Department of Social 内蒙古 Inner 11 Staff Liu huan Assistance, ,Huhhot Mongolia

黄满芬 Department of Civil Affairs, 内蒙古 Inner 12 Head Huang manfen Alshan City Mongolia

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Name Position Agency Province

申敬东 Department of Civil Affairs, 内蒙古 Inner 13 Head Shen jingdong Jalaid Banner Mongolia

李明宇 Principal Department of Social 14 吉林省 Jilin Li mingyu staff Assistance, Changchun

丁明玲 Deputy Department of Civil Affairs, 15 吉林省 Jilin Ding mingling director Wangqing

李春玲 Deputy Department of Civil Affairs, 16 吉林省 Jilin Li chunling director Tongyu

黎雪修 Deputy Department of Social 黑龙江省 17 Li xuexiu director Assistance, Harbin Heilongjiang

陈志义 Deputy Department of Civil Affairs, 黑龙江省 18 Chen zhiyi director Hailun Heilongjiang

杜延华 Deputy Department of Civil Affairs, 黑龙江省 19 Du yanhua director Baiquan Heilongjiang

黄建 Deputy Department of Social 20 安徽省 Anhui Huang jian director Assistance, Hefei

徐礼旺 Members of Department of Civil Affairs, 21 the party 安徽省 Anhui Chizhou Xu liwang group

金星明 Members of Department of Civil Affairs, 22 the party 安徽省 Anhui Anqing Jin xingming group

熊崧麟 Department of Social 23 Consultant 江西省 Jiangxi Xiong songlin Assistance, Nanchang

黄美兰 Deputy Department of Social 24 江西省 Jiangxi Huang meilan director Assistance, Xingguo

熊智明 Deputy Department of Social 25 江西省 Jiangxi Xiong zhiming director Assistance, Suichuan

蔡茜 Deputy Department of Social 26 河南省 Henan Cai qian director Assistance, Zhengzhou 59

Name Position Agency Province

王岩松 Department of Civil Affairs, 27 Head 河南省 Henan Wang yansong Song

张青华 Department of Civil Affairs, 28 Head 河南省 Henan Zhang qinghua Sanmenxia

刘三强 Principal Department of Social 29 湖北省 Hubei Liu sanqiang staff Assistance, Wuhan

胡 清 Department of Social 30 Head 湖北省 Hubei Hu qing Assistance, Wufeng

代小飞 Department of basic living 31 Head 湖北省 Hubei Dai xiaofei allowances, Shiyan

宋 鹏 Deputy Department of Social 32 湖南省 Hunan Song peng director Assistance, Changsha

谷仲茗 Center of Social 33 Head 湖南省 Hunan Gu zhongming Assistance, Sangzhi

杨红林 Deputy Department of Civil Affairs, 34 湖南省 Hunan Yang honglin director Luxi

李政清 Deputy Center of Social 广西壮族自治区 35 Li zhengqing director Assistance, Nanning Guangxi

李顺伦 General office of 广西壮族自治区 36 Head Department of Civil Affairs, Guangxi Li shunlun Longlin

黄任建 Deputy Department of Civil Affairs, 广西壮族自治区 37 Huang renjian director Hechi Guangxi

谢跃彬 Principal Department of Civil Affairs, 38 海南省 Hainan Xie yuebin staff Haikou

关平原 Deputy Department of Civil Affairs, 39 海南省 Hainan Guan pingyuan director Lingao

陈冠山 Center of Social 40 Head 海南省 Hainan Chen guanshan Assistance, Lingao

60

Name Position Agency Province

王 颢 Principal Department of Social 重庆市 41 Wang hao staff Assistance, Chongqing Chongqing

李相廷 Section of Social Section 重庆市 42 Assistance of Department Chief Chongqing Li xiangting of Civil Affairs, Wuxi

冯 娅 Section of Social Section 重庆市 43 Assistance of Department Chief Chongqing Feng ya of Civil Affairs, Wanzhou

何兆政 Department of Social 44 Consultant 四川省 Sichuan He zhaozheng Assistance, Chengdu

格绒邓珠 Department of Civil Affairs, 45 Head 四川省 Sichuan Gesongdengzhu Shiqu

刘志开 Deputy Department of Civil Affairs, 46 四川省 Sichuan Liu zhikai director Liangshan

杨 玫 General office of 47 Head Department of Civil Affairs, 四川省 Sichuan Yang mei Butuo

朱 立 Center of Social 48 Head 贵州省 Guizhou Zhu li Assistance, Guiyang

李荣章 Department of Civil Affairs, 49 Head 贵州省 Guizhou Li rongzhang Weining

何林涛 Department of Social 50 Head 贵州省 Guizhou He lintao Assistance, Zhengan

李 珂 Principal Department of Social 51 云南省 Yunnan Li ke staff Assistance, Kunming

余晓生 Section of Social Section 52 Assistance of Department 云南省 Yunnan chief Yu xiaosheng of Civil Affairs, Weixi

李跃会 Deputy Department of Civil Affairs, 53 云南省 Yunnan Li yuehui director Yongshan

李文章 Section of Social Section 54 Assistance of Department 云南省 Yunnan chief Li wenzhang of Civil Affairs, Luquan 61

Name Position Agency Province

石章宏 Deputy Department of Social 55 西藏自治区 Tibet Shi zhanghong director Assistance, Lhasa

Deputy Section of Social 四郎嘎措 56 section Assistance of Department 西藏自治区 Tibet Silanggacuo chief of Civil Affairs, Naqu

Deputy Department of Civil Affairs, 57 德吉央拉 Dejiyana 西藏自治区 Tibet director Shigatse

巴 姆 Deputy Department of Civil Affairs, 58 西藏自治区 Tibet Bamu director Mangkang

王 勇 Department of Social 59 Head 陕西省 Shaanxi Wang yong Assistance, Xian

党思政 Department of Civil Affairs, 60 Staff 陕西省 Shaanxi Dang sizheng Zhashui

李昌红 Department of Civil Affairs, 61 Staff 陕西省 Shaanxi Li changhong Langao

卢彦宇 Department of Social 62 Staff 甘肃省 Gansu lu yanyu Assistance, Lanzhou

张学鹏 Deputy Department of Civil Affairs, 63 甘肃省 Gansu Zhang xuepeng director Hezheng

魏学荣 Department of Civil Affairs, 64 Head 甘肃省 Gansu Wei xuerong Maqu

王怀福 Department of Civil Affairs, 65 Head 甘肃省 Gansu Wang huaifu Tianzhu

卢 亮 General Office of Deputy 66 Department of Civil Affairs, 青海省 Qinghai director Lu liang Xining

巨邦雄 Section of Social Section 67 Assistance of Department 青海省 Qinghai chief Ju bangxiong of Civil Affairs, Ledu

Department of Civil Affairs, 68 叁智措 Sanzhitou Staff 青海省 Qinghai Jianzha

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Name Position Agency Province

姚金霞 Section of Social Section 69 Assistance of Department 青海省 Qinghai chief Yao jinxia of Civil Affairs, Guoluo

吴 营 Deputy Department of Social 宁夏回族自治区 70 Wu ying director Assistance, Yinchuan Ningxia

马 强 Deputy Department of Civil Affairs, 宁夏回族自治区 71 Ma qiang director Tongxin Ningxia

马宗成 Deputy Department of Civil Affairs, 宁夏回族自治区 72 Ma zongcheng director Hongshibao Ningxia

李永峰 Deputy Department of Social 新疆维吾尔自治 73 区 Li yongfeng director Assistance, Urumqi Xinjiang

尹合国 Deputy Department of Civil Affairs, 新疆维吾尔自治 74 区 Yin heguo director Hetian Xinjiang

李向波 Department of Civil Affairs, 新疆维吾尔自治 Secretary 75 区 Li xiangbo Tajik Autonomous County Xinjiang

卢 燕 Department of Civil Affairs, 新疆维吾尔自治 Secretary 76 区 Lu yan Aketao Xinjiang

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Appendix 3: TA 9126-PRC Design and Monitoring Framework and Status Update

TA 9126-PRC: Strategies for Involving Social Organizations in Social Assistance Design and Monitoring Framework Status Update, August 2020

Results Chain Performance Detailed status Indicators with assessment Targets Outcome: A stronger a. New, national Planned. MOCA will issue enabling administrative guidance based on TA environment and guidance for contracted reports, sharing the TA local processes for delivery, support, final report, policy briefs, MOCA contracting of monitoring, and review and all sub-reports and social assistance of social assistance by recommendations with all delivery to social social organizations subnational levels of civil organizations issued affairs departments. created b. Guidelines, Achieved. A multi-day indicators, and 16 training session was held gender-sensitive case in August 2019 in studies used by MOCA Chengdu for to train selected 76 subnational staff from subnational staff from 20 provinces (see at least six provinces document b, participant list) based on the TA outputs including guidelines, indicators and case studies Output 1: Timely 1a. At least one policy Achieved. Policy brief interim and final brief prepared available in English and policy Chinese (document 1ac recommendations and document 1ae). The provided Chinese version was published in the MOCA Journal, May 2020. The English version is planned for online publication as part of the ADB Brief series. 1b. TA final report and • Final report is available four sub-reports in both English and submitted to MOCA for Chinese circulation to central • Sub-report 1 on national government agencies experiences is available and relevant decision in both English and makers Chinese.

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Results Chain Performance Detailed status Indicators with assessment Targets • Sub-report 2 on international good practices is available in English and Chinese. • Sub-report 3 on guidelines and indicators is available in English and Chinese. • Sub-report 4 on case studies is available in English and Chinese. Output 2: 2a. Contracting Achieved. Contracting Contracting strategies, guidelines, strategies, guidelines, and strategies, and indicators indicators were reviewed guidelines, and reviewed and refined and refined through four indicators developed through at least four workshops with at least workshops with at least 30% women participants: 30% female • inception workshop participants (Guangzhou, September 2017), • interim workshop (Guangzhou, September 2018), • training workshop (Chengdu, August 2019), • final workshop (Beijing October 2019). 2b. Contracting Achieved. Sub-report for strategies, guidelines, contracting strategies, and indicators provided guidelines, and indicators to MOCA for is available in English and distribution to MOCA Chinese (see document subnational levels 1b3c and document 1b3e) Output 3: Gender- 3a. At least 4 Achieved. 4 international sensitive case international and 12 and 12 PRC case studies studies produced PRC case studies in are available in English formats suitable for and Chinese. training and/or teaching 3b. Report on Achieved. Study tour international training report is available in study tour (with at least English and Chinese. two MOCA female There were three MOCA participants) female participants. 65

Results Chain Performance Detailed status Indicators with assessment Targets Output 4: 4a. At least 12 MOCA Achieved. The training Knowledge products trainees from six participants comprised and findings created provinces (at least 30% 76 MOCA trainees from and shared female participation) 20 provinces (at least 30% report increased female participation). knowledge of how to contract social organizations using the TA-developed guidelines and indicators and case studies 4b. TA final report, Planned. TA final report, policy brief(s), findings policy brief(s), findings and and recommendations recommendations will be shared with all shared with all subnational subnational levels of levels of MOCA MOCA 4c. At least two articles Achieved. Two articles on training study tour published in MOCA journal findings published in China Civil Affairs (中国民政) MOCA journal • Article 1 “Study and Reflection on Australian Government Purchase of Social Services” issue 2019(21). • Article 2 “Current situation, issues and countermeasures of government purchase of social assistance services” was published in the same journal, issue 2020 (05).