Limited capacity among local commissioners has resulted in poor levels of understanding of voluntary sector organisations’ ability to deliver public service contracts, a new report has found.
The report by the consultancy Perspective Economics, commissioned by the Department for Digital, Culture, Media & Sport, examines the levels of participation by voluntary sector organisations in public procurement and the barriers faced by charities that wish to get involved.
The report says the inadequate capacity among local commissioners has led to a lack of meaningful or consistent engagement with the voluntary, community and social enterprise sector.
“This has also led to fragmented policy and practice between regions and means that contracts are rarely designed with the VCSE sector in mind,” it says.
The report says the size of a charity is the major factor in determining its ability to take on public contracts.
It says that two-thirds of income from this source, representing £6.2bn a year, was earned by charities with annual incomes of more than £10m, despite that group accounting for just 6 per cent of VCSE organisations engaged with procurement.
The report calls for more strategic, long-term partnerships to be developed between commissioners and voluntary sector organisations.
“Engagement between commissioners and the sector is typically viewed by consultees as ‘ad hoc’,” it says.
“This limits the ability of the sector to work effectively in partnership, both together, and with commissioners to address long-term regional need.”
The report recommends central and local government stakeholders should “consider the areas of strategic expertise and VCSE strengths within key markets, and should explore the potential for ‘matching’ skills against contracting opportunities (at a scale which VCSEs can engage with)”.
It says this could involve co-production or feedback sessions between commissioners and VCSE bidders.
It recommends that future supply-side initiatives seeking to increase the extent of VCSE involvement in public procurement should target organisations with an annual turnover of £100,000 or more, because “these organisations are more likely to have the capacity to scale up public contracting activity”.
The report also says the government should further explore the intentions of voluntary sector organisations to bid for public procurement contracts, potentially through a representative survey.