Commissioning and procurement practice
While commissioning practice has not been the focus of this project, it is important to recognise the context charities are operating within. It is clear that the commissioning and procurement landscape presents great challenges for organisations of all sizes. There is significant evidence on the barriers charities experience. NPC’s State of the Sector report reveals that 59% of charities subsidise public service contracts with voluntary income, and 54% have turned down contracts because the risk is too high. Research from Lloyds Bank Foundation has highlighted the barriers faced by small and medium-sized organisations, from unrealistic payment structures to inaccurate information.
Some respondents expressed good experiences with commissioners; however, the majority of respondents were very negative about funding practices and their impact on communities and organisations. While some believe competitive tendering is good to work out who is best to deliver, there are others who believe that system is fundamentally flawed.
[Competitive tendering] can be a good thing, where it genuinely ensures the best quality and value for money for local people and the public purse. Too often however it is used as a vehicle to drive a 'race to the bottom' on price, resulting in instability for people who require services.
While smaller organisations face particular barriers, organisations of all types and sizes express frustration with the following practices:
- Commissioners either not allowing collaboration or forcing it without support.
- Passing on too much risk to lead provider organisations and exposing organisations to financial risk through payment by results mechanisms.
- Lack of sufficient funding to deliver high quality services, often awarding to the lowest bidder.
- Lack of, or tokenistic approaches to, coproduction with communities.
- Opaque decision-making and no recourse to challenge, making it hard for the losing party to understand the decision.
- Poor management going unchecked, from bullying to commissioners being unaware of power dynamics within supply chains.
- Lack of knowledge about the service or community, resulting in poor and unworkable service models.
- The complexity, pace and bureaucracy of procurement processes.
- Aggregation of contracts, and lack of grant funding.
There are commissioners who work well with charities, trying new ways of working to improve services and supporting collaboration across the voluntary and public sectors. Throughout this project organisations have described the steps commissioners have taken to support collaborative working, including the following:
- direct awards to consortia
- early information about upcoming bids
- innovation partnership models to fund consortia
- alliance contracts
- clarity in service specifications
- ensuring good working relationships in supply chains.
Since the pandemic we have seen commissioners, especially at a local level, improving collaboration with charities and communities offering flexibility and support as equal partners. While commissioning and procurement approaches do need to change, there are ways in which charities can work better together in the current system and model the value of collaboration to commissioners.