Can the crisis of confidence in private contractors provide opportunities for the charity sector?


This week I discuss the seemingly falling trust in the private sector’s ability to deliver on public sector contracts and the impact this may have on charities seeking to compete for contracts on future.

Charities, social enterprises and voluntary sector organisation (VCOs) can obtain funding from many different sources in order to help their beneficiaries. One of these may be by delivering services through a contract with an NHS Primary Care Trust, local authority or a government department.

Traditionally, charities and social enterprises have struggled to compete with private sector organisations for public sector contracts because large profit-making companies can often afford to undercut charities in terms of cost.

However, in its new report, Memorandum on Managing government suppliers, the National Audit Office has highlighted a lack of public trust in the ability of private sector contractors to deliver public services.

According to Amyas Morse, head of the National Audit Office:

“Contracting with private sector providers is a fast-growing and important part of delivering public services.  But there is a crisis of confidence at present, caused by some worrying examples of contractors not appearing to treat the public sector fairly, and of departments themselves not being on top of things.”

This lack of trust is not surprising given the recent media storm around private sector contracts, such as the Serious Fraud Office being called in to investigate G4S and Serco’s alleged overcharging for electronic tagging, and issues over G4S’s Olympics security contract.

The report also asks whether the rising dominance of a few major private contractors is in the public interest, underlining the requirement for greater competition for public sector contracts.

Shocking headlines showing failings within private sector contractors may turn pages but what does this actually mean for charities considering a public sector contract?

Earlier this year I wrote about the Public Services (Social Value) Act 2012 and asked the question ‘will new legislation improve charities’ ability to compete for public sector contracts?

The act was set to shift public sector contracts away from a ‘low price is best approach’, meaning that charities and social enterprises should now be able to able compete for work with private sector companies on a more equal basis. The recent private scandals may encourage those responsible for procuring government goods and services to take a very serious look at the offering available in the third sector.

Charities, social enterprises and VCOs certainly can make a valuable contribution in a market place that is open, fair and competitive. If a charity is able to be competitive and provide a professional service then they should be taken in to genuine consideration. For instance, St John’s Ambulance offers medical care to over 100,000 people a year for local authorities and is regularly commissioned by NHS trusts, private healthcare groups, local authorities and individuals.

Charities are often best placed to undertake public service activities because of their experience working on the front line and being closer to service users. In an open and competitive market, charities have the potential to be a hub of innovation, forcing progression in a field that can be stifled by an over-reliance on the same small number of private companies.

As well as receiving valuable funds to support their work, by taking on public sector contracts charities can also use their expertise to positively influence the way services are delivered.

Moving into the provision of public services is not a course of action that is right for every charity but for those who are able and willing to do so, there are opportunities to be had.

If your charity is looking to deliver its service to the public sector, our specialist consultants can help you prepare for the tendering process as well as advising on service delivery. Visit our consultancy page for more details.

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Case Study

Case Study: Grocery Aid

1.1.          Grocery Aid

1.1.1.      About our customer

Grocery Aid, the trading name of the National Grocers' Benevolent Fund, is the charity for the grocery industry. Grocery Aid helps people all over the UK who have worked, or are working, in the grocery industry and have now found that they need some extra support to get by. The help that Grocery Aid provides can make a very real difference and it provides not only monetary support, but also appliances and everyday items that many take for granted.

1.1.2.      The service we provide

The helpline was a new service for Grocery Aid. We set about improving the reach of their valuable service and sought to reach out to the people needing the help and support that they provide. In early 2010, Connect Assist successfully helped Grocery Aid launch their first helpline via our 24/7 Contact Centre. Today we offer multi-channel solutions via phone, e-mail, knowledgebase, ask a question and live chat.   The multi-channel helpline provides information and support to people and business owners working in the trade – from large supermarkets to corner shops. This includes an innovative ‘incident support’ service following attacks, arson and other incidents that are prevalent within the industry.


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