Management Development Network Event
Independent Trainers and Consultants for the Voluntary and Community Sector
Date: Tuesday 11 October 2016
Time: 11.00am to 4.00pm
Place: St. Alban’s Centre, Baldwin’s Gardens, London EC1N 7AB
A summary of the keynote speaker’s presentations and links to explore on their publications and reports.
Management Development Network members were pleased to be joined by our key speakers and Caroline Howe and David Hunter.
Caroline Howe, Policy and National Programmes Manager, Lloyds Bank Foundation. Caroline focused on developing the Foundation’s national impact, working with grant holders and throughout the sector more widely to champion the important role of small and medium sized charities. Caroline has spearheaded the Foundation’s work on addressing the impact of poor commissioning on the voluntary sector.
David Hunter, Consultant, Bates Wells Braithwaite. David’s focus on the social economy, spanning how the state can improve procurement of services for the public good; how investors can achieve social as well as financial returns from their investments; and how civil society organisations (whether charities or social enterprises, co-operatives or other forms of social business) can prosper.
Improving commissioning for the voluntary sector
Lloyds Bank Foundation has a long history of philanthropy as an independent charitable trust founded in 1985. It has a focus on investing “charities supporting people to break out of disadvantage at critical points in their lives, and promote practical approaches to lasting change”. In 2015, £15,817,272 was awarded to 374 small and medium sizedcharities under Invest and Enable programmes.
The focus of the Foundation’s grants programmes is locally-based small and medium-sized charities tackling some form of social welfare problem. It’s largest areas of funding are domestic abuse, homelessness, mental health and unemployment
Lloyds Bank Foundation’s initial interest in improving commissioning was informed by research they commissioned on the affect of the financial crisis on small to medium sized charities. The research identified that since 2010, the direction of public funding and service delivery has shifted radically towards open competitive commissioning models, where all types of providers, large and small compete for contracts to deliver public services.
The evidence suggests that large organisations, including some large charities, are increasingly dominating the market for public service provision to the detriment of small and medium-sized organisations. The smaller the income of a charity the more they have lost in income from both local and central government, despite an increase in demand for their services. Small and medium-sized charities saw the biggest losses of local government funding, losing 30-44% of their income.
Lloyds Bank Foundation own research, identified that small and medium-sized charities from their experience of biding for contracts only 26% found bidding for contracts “Manageable” or “Easy”, while 49 % found bidding for contracts either “impossible” or “Difficult”.
Commissioning: What’s wrong?
- Understanding: commissioners’ lack of knowledge about the service they are procuring and the needs of individuals can lead to practices which trivialise local expertise and shut out those with the skills and knowledge to meet needs effectively
- Processes: the processes commissioners follow can inadvertently impede on providers’ ability to bid effectively and successfully
- Specifications: aspects of contracts and tender specifications can automatically exclude smaller charities.
Poor commissioning practice
Some examples of poor practice by the worst offenders were:
- Penalised for already holding the contract and quality marks;
- Asking for absurd and irrelevant policies;
- Forced mergers;
- No negotiation;
- Unfunded TUPE requirements;
Good Practice in Commissioning
Caroline Howe, Lloyds Bank Foundation identified the following “checklist” for improving commissioning:
- a more collaborative approach
- Take a proportionate approach
- Be more accountable and transparent
- Allocate funding at an appropriate scale
- Place more scrutiny on subcontracting arrangements
- Place greater emphasis on the role of social value
- Support to small and local charities
Small is good?
Currently there is very little significant evidence to support the concept that “small is good” in terms of the voluntary sector and commissioning and thus improve access to contracts, although the Lloyds Bank Foundation is looking to address that with new research.
Central Government needs to:
- Challenge poor commissioning practice and hold commissioners to account
- Introduce a measurable target for commissioners to work with small and local charities
- Improve transparency throughout the commissioning process and delivery of contracts.
The role of the consultant
Carole identified three things that consultants can do to help small to medium charities through the commissioning process:
- Support charities in commissioning
- Challenge commissioners to use effective processes
- Promote best practice in commissioning
What can funders do?
Funders need to:
- Provide core, long term funding to small and medium-sized charities
- Build the capacity of smaller charities
- Push for structural changes
Toolkit for commissioning
Lloyds Bank Foundation has more recently focused on commissioning for domestic abuse services as a priority given the evidence of poor commissioning. Subsequently, the Foundation has produced a toolkit in collaboration with Welsh Women’s Aid, SafeLives, Women’s Aid Federation of England and Imkaan, has developed a toolkit to support commissioners responsible for violence against women, domestic abuse and sexual violence services in Wales. The toolkit entitled Tackling Violence Against Women, Domestic Abuse and Sexual Violence: A Collaborative Commissioning Toolkit for Services in Wales (August 2016). The Foundation is hoping to publish a similar toolkit with a focus on commissioning in England very soon.
Click to download the toolkit here >
Small & Medium-Sized Charities After The Crash: What Happened & Why It Matters
The Art of the Possible in Public Procurement
David Hunter, Consultant Solicitor, Bates Wells Braithwaite. David’s focus is on the social economy, spanning how the state can improve procurement of services for the public good; how investors can achieve social as well as financial returns from their investments; and how civil society organisations (whether charities or social enterprises, co-operatives or other forms of social business) can prosper.
Principles of procurement
Despite BREXIT, the EU Treaty Principles themselves still provide “both map and compass” for public procurement, and they are:
• Equal treatment
• Non discrimination
Following on from this its worth noting that market consultation is:
• Expressly permitted by Article 40
• Not just with providers but clients too
• Important to do it well
• Should be standard commissioning practice
The 2015 Regulations reflect a significant change in intent. There is a definite recognition that public authorities are major economic actors who have a big impact through their spending–and by consciously directing that spending differently they can drive positive social change and social innovation”.
So what is innovation practice:
- Where a commissioner is looking for something different
- NOT restricted to very large, high tech procurements
- Involves developing potential solutions with bidders and contracting with one to implement the preferred option
- Potentially useful where providers develop own ideas around what might make a difference
Basis for Award
The public sector when awarding a contract will consider the following
- MEAT (Most Economically Advantageous Tender) criteria, always
- Must use a cost-effectiveness approach such as life-cycle costing
- May use price-quality ratio, using criteria such as qualitative, environmental or social aspects
- May set price and ask bidders to compete purely on quality
- Criteria must relate to subject matter of the contract “in any respect and at any stage of their life cycle”
Light touch regime and reserved contracts
The new Regulations provide greater freedom in the areas that arguably have the greatest potential for social change and innovation – social, health and education services. These are now governed by the new Light Touch Regime relevant to many civil society organisations, including the introduction of a higher threshold (EU750,000) – Only restrictions above the threshold apply to how the market is informed of the opportunity and the outcome of the process. However, whether above or below the threshold, there is wide discretion around the process itself, provided it complies with the Treaty Principles,
Another aspect of the light touch regime are “reserved contracts” that applies to a subset of light touch regimes services and are of relevance to the voluntary sector. Specifically, opportunities may be limited to qualifying organisations, based on these criteria:
- have a public service mission
- reinvest profits to further that mission
- management or ownership of the organisation is participatory
- has not been awarded a contract for these services in previous three years
- Can only apply to a contract for three years
Social Value Act
A feature of the new Regulations and the Social Value Act is an increased focus on enabling commissioning for social value and wider social impact, which is great for charities. It requires those who commission public services to think about how they can also secure wider social, economic and environmental benefits. All areas of relevance to charities
Although social value was relevant to procurement long before the Social Value Act, through the Local Government Act 1999, Public Contract Regulations 2006, Social Business Initiative 2010 and Buying Social 2011. One limitation is that there is no formal legal definition.
Best practice in procurement
David Hunter, BWB identified these key elements for best practice in procurement:
- Pre-procurement market consultation
- Clearly established and communicated objectives
- Consistency between objectives, specification, process and contract
- Compliance with the Treaty Principles in market communications and in internal processes of the authority
- Relevance to the subject matter of the contract
Procurement and Brexit
Give that the current government is committed to leaving the EU is some form or other, you might ask the question “Why should we bother with EU regulations if we are leaving the EU?”. Firstly, the regulations are going to be in place until we leave the EU which has now been identified as sometime in 2019 with the business of procurement still going on. Equally there is still going to be the need for some form of regulation, with the Great Repeal Bill aim to by convert all EU requirements into British law as soon as Britain exits the bloc. In practical terms, the law makers in the UK will be more preoccupied with working on trade agreements, than reviewing existing legislation on procurement.
More information on the procurement can be downloaded here > http://www.hctgroup.org/uploaded/the-art-of-the-possible-in-public-procurement.pdf
The impact of Brexit
Led by Linda Laurance, Chair of EUConsult, the European network of consultants to the not-for-profit sector. Linda proposed that one key approach for us as consultants in a time of uncertainty, it was an opportunity for us to pool our perspectives and experience to think through the implications for us, and for our clients.
Key for Linda Lawrence was looking for the “positives” in the outcome and to be positive in our approach to working with clients in dealing with the outcomes of the referendum.
There was a need to recognise that many were voted “Leave” were also from some of the areas who have benefited most from funding from Europe but equally had been the most affected by Government austerity cuts. The decision to vote leave was also very much and anti-austerity vote.
It was acknowledged, that we need to explore more about what we can do and how we contribute to the important discussions that need to be had regarding ourselves, our clients and their beneficiaries should Brexit become a reality.
Our thanks for the speakers and convenors for their contributions.
If you are a member of the Management Development Network, you can download the presentations here. If you not a member then why not join us. Click to join!