Locality has called on public service commissioners to take heed of the problems of high-profile outsourcing firms Carillion and Capita and commission more local organisations, as it publishes the findings of a pilot study.
In a report published yesterday, Locality said current local authority procurement practices “weakens the viability of local community organisations” and “suck money out of the local area”.
The report, part of Locality’s Keep it Local campaign, calls for “fundamental change” in local government procurement systems, with a greater focus on local organisations.
Locality calls for more “top-level leadership” within councils, so local procurement can “be realised in commissioning frameworks, and be properly monitored and scrutinised”.
It says the commissioning environment remains fractured in its attitude to local organisations, with some procurement officers being more risk averse than others, and urges a “joined-up system”.
The report says social value is not well embedded in commissioning but remains “the most useful current framework”.
Make a compelling case for impact
It calls for community organisations to help nullify commissioners’ scepticism of procuring their services by “making a compelling case for the local economic impact they bring”.
Tony Armstrong, chief executive of Locality, said: “Commissioners must heed the warning of the collapse of Carillion, and the profit warning at Capita.
“It’s time to halt the trend of outsourcing at scale to multi-national companies. Mega-contracts delivered by large national providers fails to meet people’s needs and wastes money.
“Organisations rooted in their local communities have deep knowledge and understanding of the area, strong existing relationships and the expertise to support people with complex needs. But their contribution goes much further – with huge impact on local jobs and the local economy.
“There is one sensible way forward for commissioning pubic services – keep it local.”
The report includes a pilot study looking at 10 local organisations, most of which are charities, providing services to five councils. It said their work enabled approximately 1,400 jobs and £120m of gross value added (GVA) to the local economy each year.
Royds Community Trust employed 312 people for its Bradford contract, providing £70m GVA to the local economy each year.