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Cabinet Office considers appointing charity contracting rep3

Finance | Niki May Young | 17 May 2012

The Cabinet Office is looking at appointing a commissioning specialist to improve contracting relationships with the voluntary sector, Lord Wallace revealed at the Civil Society Question Time event yesterday.

Responding to a question from Su Sayer, chief executive of United Response, on whether small charities are being put off taking on contracts due to nervousness over payment-by-results (PBR), Lord Wallace (pictured) advised that Francis Maude has been looking at retraining government procurement staff to be more inclusive towards smaller local organisations:

“There is a large issue behind all of this, that is the way central government deals with very local organisations," he said. "One of the things that Francis Maude has been looking at is how you train people within central government who are giving contracts to think about how local it is, because they all think it is much more efficient to do it at a large-scale regional level,” he said.

He went on to say that the Cabinet Office is also looking at appointing “another Crown representative whose job will be specifically to look at the contracting relationship with the voluntary sector to make sure that others do not ignore that dimension”.

Defending the government’s approach to the PBR model, Liberal peer Lord Wallace, who is the Cabinet Office spokesman in the House of Lords, said the coalition was “learning as we go along with this and it’s a process with a lot of experimentation which is going to have to go on”.

However Sayer remained unconvinced, responding that: “It’s still very, very scary. And so, even though we are quite a large organisation with a lot of staff, we are only taking on very, very, very tiny contracts and if we are, I dread to think how scary it is for smaller organisations.”

Addressing barriers to payment-by-results

Panelists Lord Hodgson and NCVO chief Sir Stuart Etherington both identified cashflow as the main barrier for charities in the PBR model and mooted social investment as a solution. Hodgson, however, highlighted the bureaucratic barriers that will be faced in relying on this to improve matters for smaller charities:

“I think payment-by-results, unless done in consortia, may present a challenge to smaller charities,” said Hodgson. “There are of course opportunities if we are able to find ways to develop social investment and mixed-purpose investment which will require changes from the Ministry of Justice, and changes in the Financial Services Authority. It is quite a number of pieces on the chess board that need to be moved which could perhaps help smaller charities bridge that cashflow gap, but I think just straight off many charities will find it hard to do that because of the time between starting the work and getting paid for the results.”

Susanne Rauprich, chief executive of the National Council for Voluntary Youth Service, said that the public service delivery agenda and that of the Big Society "do not easily mix". She advised from the audience that there are many organisations which would not be able to embrace social finance options to get to the position that they could take part in PBR contracts but have a lot to offer in terms of finding solutions for their young beneficiaries.

"Unless we bridge the gap between the Big Society-type organisations and the public service contract-type organsations we will never find a solution," she said.

Recognition of risk

Lesley-Anne Alexander, chair of Acevo and chief executive of RNIB, said the panel was missing a key point in its discussion of PBR, that of risk-sharing.

"Charities work with the most marginalised communities," she said. "I don't know if any of you have ever tried to persuade an employer to get a blind person on their payroll - it's blooming difficult work," she said. "What we need in the contracting environment is the recognition of risk-sharing and not simply offloading risk on to what happens to be a very willing voluntary sector."

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Who's Who: Lord William Wallace | Su Sayer