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 ii 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 iii 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. iv 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