Public sector health bodies routinely ignore the Social Value Act when they commission services that charities could deliver, an audience of charity delegates heard last week.
Jane Payling, head of health and integration of the Chartered Institute of Public Finance and Accountancy, said strict regulation meant the health sector had not commissioned organisations delivering social value.
Payling was speaking at the NPC Ignites conference last week, hosted by think tank New Philanthropy Capital.
She said strict regulation by the NHS Trust Development Agency meant the health sector was unable to push through with innovative ideas.
"Contracts are based on results, so the health sector is very risk averse," she said.
“NHS England set the rules and so far there has been very little push in terms of the requirement to push forward with the Social Value Act.
“I think that might be something the sector needs to raise – that the Social Value Act is there but is not being routinely applied across the sector.”
Payling said funding allocation in the health sector - made on a single year basis - led to "a great level of uncertainty about what is coming in the future”.
“If you’re a health provider, it’s pretty likely that your funding is going to be pretty similar the following year. But it also means that health is very risk-averse about making long-term decisions. It will always talk about the fact that it is on a one-year allocation and that provides a barrier," she said.
According to Payling, Social Value Act requirements are an active topic of conversation among "local authority finance colleagues". But she said, she has heard "nothing" in relation to health.
Payling said the fact that the Social Value Act was not being applied to the health sector has a knock-on effect for outcome reporting.
“Outcome reporting is not happening in things like health,” she said. “I don’t think health necessarily understands its outcomes very well. It is very, very good at knowing about processes and counting numbers of patients etc, but very bad at knowing what impact it actually has on people through its work.
“Looking at ways of counting impact might be another way in - in terms of ideas,” she said.
In a statement to Civil Society News, Payling said health bodies and particularly providers "weren't fully aware of or implementing the requirements of the Social Value Act".
"This would apply to health bodies commissioning from charities, although I suspect that Clinical Commissioning Groups are more aware than providers," she said.
Commissioning struggles for small health charities
At NPC Ignites last week, the conference heard that small health charities are increasingly struggling to win public service contracts.
Dan Corry, chief executive of NPC said: “Small charities have always had a problem dealing with public sector grants and contracts but it’s got harder as the contracts have got bigger. The public sector feels it hasn’t got much money and it needs to be very clear about outcomes. So the processes get very bureaucratic.”
Corry said there was a concern that devolution would concentrate more money on larger city regions than smaller local authorities.
“You can’t just tell the public sector to give money to any charity,” he said. “But there is an issue, particularly in the health areas, that there are a lot of small charities that have historically done a fantastic job at being that interface.
“They are finding it very, very difficult to access funding at the moment. So for a charity that mainly works with 20 people in their town, there is no way that they are going to win a contract and there’s no way they are going to be a sub-contractor or a sub-sub-contractor. And yet, they are very important.”
