'Risk aversion' culture can prevent the sector winning public sector contracts, charities minister tells conference
The government must do more to make impact measurement simpler for the voluntary sector, according to Nick Hurd, the Minister for Civil Society.
Speaking yesterday in London at the Good Deals conference, which bought together investors and social entrepreneurs, Hurd said there was a "growing buzz" in the sector about the need to measure social impact.
"My concern is that it’s become too complicated for the sector," he said. "There’s a great profusion of methodologies which confuses people.
"We as a government should be working with the sector, as the biggest funder, to say ‘What should we be measuring?’ We should be making it easier to measure impact."
He said some people hated impact measurement, but most people recognised it was growing.
"I think it’s a fact of life, if you believe as I do that the unique selling point of the social sector is its ability to deliver impact," he said.
Hurd also said the government must change a "massive culture of risk aversion" among public sector contracts to help to increase the number of contracts won by social enterprises and charities.
He said one way to achieve this was to have more innovative contracts, including more payment-by-results contracts in which social organisations were rewarded for the level of impact they achieved.
He cited as a good example four social impact bond contracts in development by local councils to work with problem families.
"We’re asking ‘Can we create a new type of contract?’ he said. "But the more I get into this, the harder it looks because there’s a massive culture of risk aversion in the public sector. If you sit with commissioners, as I have done, and talk about the environment in which they work, it’s very hard.
"There are queues of people at the door saying ‘You can’t do this’. But we can’t underestimate the risk of sticking with the status quo."
Hurd also said the government could consider whether tax incentives might encourage more social investment.