Voluntary organisations are winning fewer than 5% of government contracts, a similar proportion to three years ago, analysis shows.
Government figures published last week state that voluntary, community, and social enterprise (VCSE) organisations have been involved in 17,656 government contracts worth £24.4bn over a five-year period.
This equates to 4% of the total value and 6% of the total volume of public contracts awarded between April 2019 and March 2024, according to the report produced by Tussell for the Department for Digital, Culture, Media and Sport.
A previous study covering four years from 2016 to 2020 found that a similar percentage of contracts, 5%, went to VCSEs over a four-year period. This was a total of 7,330 government contracts worth £17bn from 2016 to 2020.
The lack of change generally has come despite initiatives such as the Social Value Act and the Cabinet Office publishing a procurement policy statement to “maximise procurement spend” with VCSEs earlier this year.
Which parts of the public sector fund VCSEs?
The vast majority of VCSEs, 80%, in the study are registered charities and the rest are either community interest companies or not-for-profit organisations.
Local government awarded “by far” more contracts to VCSEs than any other part of the public sector – 11,063 contracts worth a combined £11.7bn from 2019-24.
VCSEs had greater representation in areas such as homelessness and support for victims of sexual violence than others, the report shows.
Local government contracts with VCSE organisations were worth £2.3bn in the financial year 2023-24, a 2% fall from the year prior. VCSEs won about 2,500 contracts from local government that year.
This compares with contracts worth £440m from central government in 2023-24, down from £1bn in 2022-23.
Meanwhile NHS contracts were worth £1.8bn in 2023-24, up from £0.83bn in 2022-23.
Decline in number of new VCSEs winning a contract
In 2021-22 there were 947 VCSEs which won their first public sector contract but since then there has been a steady decline.
That number dropped to 851 VCSEs in 2022-23 which fell again to 778 in 2023-24.
Half of the VCSEs named on a public sector contract won a single contract in the five-year period covered by the research. Some 45% won between two and ten.
A small minority of VCSEs, 293, won more than 10 and 22 attained more than 50 contracts each.
Services delivered by VCSEs
The health and social care sector was the largest public commissioner of VCSEs, delivering contracts worth £16.7bn over five years.
This was almost 10 times larger than the second biggest sector, disability, which delivered £1.8bn. Offender rehabilitation came third with £900m followed by legal and advocacy with £500m.
Two of the eight sectors were dominated by VCSE contractors. These were homelessness, contracts worth £900m, and domestic violence and sexual abuse, with contracts worth £600m.
VCSEs won 71% of the value of contracts relating to support for victims of domestic violence and sexual abuse, and 58% of those relating to homelessness, the report stated.
Which charities have won contracts?
In the health and social care sector, Community Integrated Care won the most contracts, 30, worth £166m over the period. Its largest contract came from Hampshire County Council, valued at £34m.
This was followed by Barnardo’s, with 19 contracts, worth a total of £42m.
The Brandon Trust only won three contracts but these brought in £111m, ranking it second in terms of contract value.
Meanwhile, disability charity Affinity Trust won 13 contracts worth £85m.
The largest single contract awarded was by Brent Council in 2021 which provided £60m to Equinox Care under the title “supported living services”.
Equinox Care, Lewisham Nexus Service, the Avenues Trust and Coventry and Warwickshire Mind received only one contract each but with values between £51m and £60m.
