Charities will have more opportunity to win government contracts under a Conservative government, but it will also be expected to deliver much greater productivity and scale, Shadow Chancellor George Osbourne told a summit of civil society leaders yesterday.

In a Conservative Party summit hosted by Acevo in the same Westminster room where Tony Blair announced his triumphant Labour victory in 1997, the hopeful future chancellor told charity chief executives that  "you should get paid by results".

He said that under Tory rule the sector could look forward to longer-term contracts, a more professional commissioning process, streamlined procurement process and a key role in public service provision. But he warned that his government would expect sector service providers be able to scale up, increase professionalism and provide value for money. "We need much greater productivity in the public service", said the minister.

Osbourne suggested moving away from a "process-based" payment scheme for contracts towards an impact-based approach would represent an administrative saving for charities undertaking public service provision.

But both Osbourne and the subsequent parade of Tory shadow cabinet ministers who spoke at the event admitted that the process would be difficult to implement. "We want to talk to you about how we can get payment by results going," he said.

The Conservative speakers also suggested that a reform of the way commissioners decide on contracts would also be a priority, with Philip Hammond MP commenting that "we will work on the commissioners... We will create a receptive audience of commissioners to new ideas."

Oliver Letwin said that payment by results will also "recognise that some people are harder to help than others" and look at introducing price differentials to reflect the disparity and avoid some charities picking only the low-hanging fruit for results-based contracts.

Meanwhile Lansley said that the shadow government would enact an "any willing provider policy" and that he could envision a set-up wherein third sector organisations themselves would be responsibile for commissioning.

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Tories emphasise payment by results

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Directory: Association of Chief Executives of Voluntary Organisations (ACEVO)