Flexible New Deal: charities 'might get some subcontracts'

The Wise Group is the only sector organisation to be named a preferred bidder

Charities could still be involved in delivering the Government's Flexible New Deal scheme, despite being almost totally overlooked in the bidding to be prime contractors.

The Wise Group, a Scottish social enterprise, was the only UK not-for-profit organisation named as a preferred bidder for the 24 prime contracts awarded by the Department for Work and Pensions.

Working Links, a private-public-voluntary partnership that includes the charity Mission Australia, won four contracts worth £559m over seven years. Overall, however, large private companies dominated.

Mike Lee, regional director for the midlands at Working Links, said it planned to subcontract work to dozens of voluntary organisations, and charities could still get involved.

He said charities needed to become more results-oriented to win more welfare-to-work prime contracts. "The voluntary sector is uncomfortable with the concept of payment by results rather than by fee," he said.

Catherine A'Bear, chief officer for corporate affairs at the Shaw Trust, which bid unsuccessfully for nine contracts, said third sector performers were being overlooked. "If the DWP had a process that looked at performance rather than what people put in their tenders about what they will achieve, maybe the third sector might do better," she said.

A DWP spokeswoman said it expected prime contractors to "employ a strong raft of subcontractor organisations across the public, private and voluntary sectors".

The Peabody Trust was a shortlisted third sector bidder for prime contracts, but withdrew. "With the jobless level increasing and the economy shrinking, it could not be envisaged how we could deliver employment outcomes that would approach the target percentages," said a spokesman.

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