Change rules around public contracts to let charities compete fairly, Big Society Capital tells government

13 Jul 2016 News

The government must make three changes to public commissioning to make the rules fairer for charities and social enterprises, a group led by Big Society Capital has warned ministers in a letter today.

The letter is also signed by 12 other social investors, impact measurement experts, and large service delivery charities. It follows a report conducted by think tank Reform and commissioned by BSC – the £600m wholesaler founded by government to grow the social investment market.

The report found that the government’s commissioning structures created a bias towards large private sector organisations, and that this was not delivering the best outcomes for beneficiaries.

It found that the government is about to launch another large public sector commissioning programme, the Work and Health Programme, and is likely to repeat mistakes made in previous programmes such as the Work Programme, a jobs scheme, and Transforming Rehabilitation, aimed at reducing reoffending.

It recommends the government should:

Guarantee that any organisation participating in the programme should receive a guarantee of a minimum number of beneficiaries to work with.
Reduce the strength around what is called a “parent company guarantee” – essentially a financial promise that the government will not lose money on a contract – which all but the largest organisations cannot afford to meet.
Focus more on the quality of bids, rather than the price.

“This is about effectiveness and value, not ideology,” Cliff Prior, chief executive of BSC (pictured), wrote in his introduction to the report.

“Public-service procurement needs to be competitive if it is to deliver the best outcomes for those in need and achieve value for money.

“As this report highlights, at the moment there is not a level playing field, and not enough diversity, in both the way public service commissioning is designed and run. Government and local commissioners need to create conditions in which new providers including charities and social enterprises are better able to bid for and secure contracts.”