Magazine article Public Finance

Last Place for Third Sector in Commissioning Race

Magazine article Public Finance

Last Place for Third Sector in Commissioning Race

Article excerpt

When the winners of the first phase of the Department for Work and Pensions' Pathways to Work contracts were announced in September, the sense of disappointment among voluntary organisations was palpable.

The third sector was awarded only 13% of the prime contracts, despite submitting bids constituting 23% of the total received.

By contrast, private sector bids constituted 72% of the total but private sector companies secured 87% of the work.

Expectations had been high. Ministers had started to back their warm rhetoric on greater engagement with the third sector with action.

Last December, the Office of the Third sector (which sits within the Cabinet Office) published Partnership in Public Services, a plan setting out the practical steps that can be taken to remove barriers in commissioning and procurement chains.

Specifically, the tendering of the DWP s Pathways to Work contracts, which aim to get people off Incapacity Benefit and into work was presented as the moment that would bring about a real change in the commissioning process and see the third sector becoming involved as a major player.

'We were certainly given very clear indications from ministerial level that they saw this as an opportunity to demonstrate the government's enthusiasm for the third sector through the procurement and commissioning systems,' said Peter Kyle, director of strategy and enterprise at the Association of Chief Executives of Voluntary Organisations.

'The sector didn't just imagine this sense of enthusiasm, which is why we wanted an inquiry to see what went wrong.'

Acevo commissioned Dame Mavis McDonald, former permanent secretary at the Office of the Deputy Prime Minister, to chair an independent inquiry to scrutinise the contracting process and recommend how it could be altered to allow the third sector to compete more fully.

McDonald and her panel reported on November 22, identifying a lack of clarity about the outcomes the DWP wanted to achieve. If greater third sector involvement was what ministers wanted, they could not expect their procurement professionals to deliver it without a clear policy lead from the top of government.

While it was legitimate for the government to have different sets of objectives - greater efficiency, improved customer service, a bigger role for the third sector which of these objectives should be given most precedence was a political choice.

"This isn't a choice for the procurement experts running the project,' said McDonald. 'This is a choice for the people in charge of the policy - a balancing out of what they want to achieve, knowing that their procurement choice can impact on whether or not they can achieve that objective,' she added.

'If you really mean what you say about involving the third sector, you have to plan that in to start with.'

McDonald's is not the only mind that has been considering the tricky question of how the third sector can better engage with the commissioning process. The influential Commons public administration select committee is taking its first look at third sector issues and considering the costs and benefits of the government's policy.

Ministers are prevented from using one of their favourite tools target setting - to bring about change. Strict European Union competition rules prevent the government from stipulating that a certain proportion of its business should be given to a certain type of contractor.

Nor is it the approach the government wants to adopt. Cabinet Office minister Ed Miliband recently told the PASC that would not be appropriate for him to make judgements on what proportion of public services should be given to voluntary organisations to deliver. …

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