The new Right to Challenge power is a front for national charities to raid public services; and a ‘Trojan horse’ to use the small VCS sector to privatise public services, warns a new report.
The new Right to Challenge gives only voluntary and community groups, parish councils and local authority employees the right to ‘express an interest’ in taking over the running of a local authority.
However, Andy Benson, chief executive of the National Coalition for Independent Action (NCIA), warns that while only this select group can ask to take over the running of a public service, if a 'Right to Challenge' is accepted, the council must run a competitive bidding process which any organisation – private or voluntary - can enter.
“In practice, it is only large organisations or consortia that will be able to take this questionable step,” Benson writes in the report Localism: threat or opportunity.
“Rules for advertising, tendering and awarding contracts including requirements such as the size of a group’s reserves… [mean] many local community groups will never get through this stage. Those that do will face a complex and speculative bidding process that makes high demands in terms of experience, time and cost.”
Benson also warns that the new Right to Challenge provision will open the door to ‘service raids’ from national charities, as challengers to contracts do not need to have a local connection in order to bid.
“These charities – aping the private sector companies like A4E who have led the way on raiding local services – have whole departments of people whose job is bidding for contracts," he says. "Small- to medium-sized voluntary agencies, whether embedded in their communities or not have little chance against these odds."
Neil Cleevely, director of policy and communications at NAVCA, also raises serous concerns about the Right to Challenge power in the report, warning that it will create Trojan horse challenges fronted by local groups set up by national players, or genuine local groups facing financial pressures lured into mounting a challenge with the promise of easy money.
“We support the principle of communities exerting greater influence on local services to maintain standards,” says Cleevely, but he warned: “We do worry that without thoughtful implementation a Challenge may lead to ever larger, standardised contracts that fail to reflect the local context or offer any real local accountability.”
The Right to Challenge came into power on 27 June 2012 and applies to all county, district, unitary metropolitan and London borough councils and fire authorities in England. It was contained within the Localism Act which gained Royal Assent last year.
To read the full report from NCIA and TUC click here.
