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Commissioning in Crisis – Lloyds Bank Foundation

February 1, 2017

cicSMALL charities are failing to secure government and council contracts, owing to “absurd and irrelevant” demands in the application process, a study of 120 contract tenders. The study says that the move towards hiring’ larger firms has caused a reduction of up to 44 per cent in small- and medium-sized charities’ income.

A combination of “excessive” amounts of detail requested in applications, “unrealistic” timescales for putting applications together, and a “lack of communication” from contract commissioners, who make decisions about which charity wins a contract, are all making it difficult for charities to secure_contracts.

More than half of the charities surveyed for the report said that they were prevented from bidding, or were unsuccessful in their bid, for con­tracts, owing to red tape.

In one example from the report, a charity that applied for a mental- health-support contract was required to give evidence on its policy on “hard-hat areas”.

Smaller charities have to work out of hours in order to compete for contracts. One respondent felt that they were pitted against ‘lage organisations, with teams of professional bid-writers”, making it difficult for them to fulfil their day’ jobs while putting together an application.

The founder of Cedar UK and the foodbank Gavin Kibble said: “If you are a small charity look­ing to take on a local-government contract, you will find that you will be stretched if you are not in a part­nership. You need a pool of people who can pick up -contracts, whether they come from the city council or national government.”

The founder of Oasis UK, the Revd Steven Chalice, said that, while working in partnership was good for charities, the diversity of church communities had huge potential for improving their charity outreach.

“The wonderful thing for every church is that it has lots of people who are working in the sector that it wants to talk to,” he said. “People sit in the church and sing hymns to­gether, jbut] they just don’t know one another and one another’s net­works.'”

The chief executive of Lloyds Bank Foundation, Paul Streets, said that charities were increasingly being forced to undergo “lengthy, convoluted, and expensive pro­cesses” to secure funding, and that they were “fighting tooth and nail so their vital support can be ‘com­missioned’.

Commissioners were also accused of a “lack of communication.


Commissioning’s worst offenders This research sought to better understand the processes behind commissioning, to identify good practice and call out poor practice. In reality, examples of poor practice across England and Wales far outweighed the good. We’ve witnessed the disappearance of common sense amongst commissioners in favour of standard, rigid processes that failed to understand the social issues they were trying to address. According to Cabinet Office guidance, commissioning is supposed to embody “the effective design and delivery of policy, solutions or services”.

But the examples below show how far removed the reality of commissioning can be

Unrealistic payment structures Payment by results contracts are, in themselves, tricky due to the cash flow problems they create. Add to this additional payment pressures and many charities, particularly those that are small and medium-sized, can be excluded: “A complex and risky payment mechanism, the requirement to work with subcontractors and to pay smaller contractors upfront.

When the tender was released, [the service we deliver] was removed, with no explanation as to why. A few months later we found out that another provider had been given the money, without a proper process.”

“On further reading the contract details it states that if you run out of money due to demand it is down to the charity to find the income required to complete the contract, no further funds will come from [the commissioner] and the charity has to sign to agree that they will use their charitable income to complete the contract if necessary.”

The bidding process was extremely long-winded and took our CEO 5 days to read all the relevant documents, clarify the meanings of many of them,…and gain advice on how to answer obscure questions which felt irrelevant to our service.”

It was a huge amount of work. It involved approximately two staff members and took 10 days of our time. We only have 10 staff so this is a significant amount of work.”

It was like playing guess what’s in the commissioners’ heads!”

Crucial information was changed at the last minute, making it impossible to create a viable budget for the service

“They…said they wanted local – the contract went to a national organisation.

The report is online here

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