The way public sector commissioning is shaping up is a real problem for charities and those needing the services we provide. The way cost takes precedence over people is short sighted, does not provide value for money, and does not provide effective outcomes for the client. Of course I’m generalising, not all commissioning is bad; but having experienced firsthand an example that is so poor I find it hard to comprehend, and having discussed the situation with colleagues in similar organisations; it seems bad commissioning is something that happens on a regular basis and needs to be addressed – surely it’s in everyone’s interests to make sure the limited resources available are used effectively?

A brief resume of the situation we at Birmingham Settlement have faced goes like this. We have been delivering services to people and communities in the same area since 1899 and money advice is a core activity, we’re good at it – National Debtline came out of the Settlement, we understand how it works! Staffordshire and West Midlands Probation Trust (SWMPT) awarded us a contract in 2008 and we have successfully delivered since, overachieving against target on every front; something acknowledged by SWMPT. The contract was put out to tender at the end of its term and we lost – very disappointing but it happens and we understand that. What’s different this time is that when we received feedback, it became very apparent that price so skewed the scoring that the likelihood of anyone but the cheapest option winning was slim. In fact, in this case, if you took the scoring for cost out we would have won; so an agency could score higher in ‘expertise’, ‘quality’, and ‘experience’ but if they were just a bit more expensive – would lose to someone with limited or no experience.

It also became apparent that the panel reviewing the bids had virtually no knowledge of the subject area – indeed SWMPT has confirmed they do not consider the service to be “sufficiently technical or complex as to require high levels of specialist or sector-specific expertise within the panel”. Clearly it was not just the panel that didn’t understand the subject area – if I point out here that the winning bidder does not currently, and has never held a Consumer Credit Licence – a legal requirement to deliver financial advice of the type commissioned; you begin to get a flavour of our frustrations – put simply, the winning bidder does not have the legal framework in place to deliver the service – so how could the panel award them the contract I hear you ask? I could go into detail on other points but I’ll save those for another time.

There is another and no less serious threat to locally based charities like the Settlement and that comes from the nationals. Again, not all nationals are bad, and I know of cases where partnerships work well and support communities effectively. In this case, the winning bidder was Nacro, the crime reduction charity. We know them quite well, their offices are next door to ours and they refer clients to us for money advice – why do they refer? Because they do not deliver a money advice service and never have done – some basic advice in prisons yes, but not a full casework service (that’s what their management has told us). The Nacro bid was based on TUPE – taking our delivery team as a unit and relocating it 15 yards down the corridor into their offices. To me this is straightforward ‘asset stripping’; and is simply wrong!

How asset stripping locally based charities that have spent years building trust, local understanding and knowledge sits in terms of Nacro’s value base is another question. I’m sure we’re all aware of the rhetoric surrounding partnerships, consortia, joint-working and so on; whether Paul McDowell, Nacro’s CEO or Matthew Litobarski, Nacro’s Chair have a view on this I don’t know, but I do know they are not alone in using this tactic to win contracts or enter new markets in the ‘dash for cash’. It would also be interesting to know what the NCVO’s stance on these tactics is; Sir Stuart Etherington has spoken about the need for joining forces on a regular basis and the recent success of the ‘Give it back George’ campaign shows what can be done when we do join forces – something Nacro are clearly very ‘selective’ about. For me, the reality is unless we take a stand together against this type of behaviour we will simply wither away and die – and that is bad news for those who need our services.

In summary, there are 3 issues threatening the survival of locally based independent charities like Birmingham Settlement;

  1. The way commissioners put ‘cost over client’;
  2. The way commissioners ‘do not understand’ the services they commission;
  3. The way nationals are content to ‘asset strip’ locally based charities.

I raised these points with Nick Hurd recently and to give him credit, he was aware of the problem; earlier this year he cited the Iceni case in Suffolk as an example of “extremely bad commissioning”. The fact that so many people from different places have acknowledged our concerns prompted me to submit a FOI request to SWMPT; not surprisingly the request was refused but I have appealed and will keep you in the loop. In the meantime, it would be great to hear if anyone else has a similar case they’re willing to share?