Minister for the Cabinet Office Frances Maude has admitted to MPs that the government has not been very successful in creating a level playing field for smaller charities to compete with the private sector for public sector contracts.

Maude was speaking today at the final evidence session of the Public Administration Select Committee's Big Society inquiry, along with minister for civil society Nick Hurd and Greg Clark, minister for decentralisation and cities.

MP Charlie Elphicke asked if the Cabinet Office was making sure that charities and social enterprises were getting a “fair crack of the whip” when competing for public sector contracts.

“We have not got it quite right yet,” admitted Maude. “We need to speed up progress, do smaller bites where small organisations can bid successfully.”

Maude also said that the procurement process needed to be less onerous, citing a case where an organisation said it had so far spent £800,000 to bid for a contract.

“This is nonsense,” he said. “We have to get much better at commissioning. It is too easy to do risk-averse big contracts from a big provider, which excludes smaller organisations."

MP Robert Halfon also took up the case for smaller charities at the meeting, asking why only “Tesco-like” charities could apply for the £107m Transition Fund.  The Fund was only open to organisations with a turnover of £50,000 or more.

“Why couldn’t you also have a micro fund?” he asked.

Hurd said that there was a limited pot of money and the Office for Civil Society had to prioritise. “We thought the organisations most in need were very vulnerable to public sector cuts.”