Charities have been delivering public services for years—but the way the government commissions these services is changing. Opening up public service provision offers plenty of opportunities for charities—but it creates more competition, and brings challenges too. NPC’s report investigates how changes to commissioning are affecting the charity sector, and how charities are responding.
When the going gets tough
The charity sector is facing considerable changes to the billions of pounds of government funding that it receives every year (£13.9bn in 2009/2010). Reforms to public services, the deficit reduction programme and the coalition government’s Big Society agenda are all affecting the amount of funding going to charities and the way that this money is given.
This report provides an in-depth insight into how these changes are affecting the sector, and how charities are responding. We surveyed charities that have an income over £800,000 and that earn some of this income from government. Over 90% believe they face more risk in the current commissioning environment than before, and this appears to be driven by three elements: new funding mechanisms, delivery of services in partnership, and cuts to charity sector income.
It is in everyone’s interests for commissioning to work for charities. If the charity sector is to continue to flourish, if the government is to achieve its vision of the Big Society, and if people in need are to get the best support available, then charities and commissioners must both respond. Our findings have implications across the sector:
- Charities need to continue to build their skills and capacity to respond to bids and compete effectively for contracts in this new environment. They need to develop and strengthen their relationships with potential partners and thinkabout how they can work together.
- Commissioners and the government need to be aware that opening up contracts to bids from charities is unlikely to achieve a level playing field.
- Trusts and foundations can help smooth the transition to these new ways of working, providing core support that gives charities the breathing space to adapt.
We have relied on contract work for a long time so we don’t have a long history of churning out grant applications. There is money around, but it’s about having the time and resources to actually pursue it.