Payment-by-results statutory contracts are worth £60bn, says Lord Wei

24 Feb 2011 News

Lord Nat Wei, government adviser on the Big Society, has said government payment-by-results contracts will be worth £60bn annually.

Lord Nat Wei

Lord Nat Wei, government adviser on the Big Society, has said government payment-by-results contracts will be worth £60bn annually.

Lord Wei (pictured) was speaking on new forms of funding for the charity sector at a conference on investing in civil society organised by the City Bridge Trust this week.

He told an audience of charity sector leaders to expect a new era of funding, with government grants being replaced with payment-by-result contracts. He said these contracts will be worth £60bn annually.

However, audience members reflected ongoing fears in the charity sector that payment-by-results models will load too much risk onto voluntary sector providers.

Fiona Ellis, chair of the NCVO Funding Commission and Sara Llewellin, chief executive of Barrow Cadbury Trust, both expressed concern that payment-by-results diverted risk from the government to the charity sector.

Danielle Walker-Palmour, director of the Friends Provident Foundation, added that she thought the Big Society agenda was transferring risk from government to individuals.

Government ministers, however, have insisted that public service deliverers must accept risk in the new government funding landscape.

DWP minister that it was how business worked:

“Business raises funds to get going,” he said. “They take this risk and then make enough money to cover the costs. That’s business."

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