Government procurement often shows "a lack of understanding of the voluntary sector" and excludes charities from contracts, the National Council for Voluntary Organisations has said in its response to a parliamentary committee on procurement.
In a written submission to the Public Administration Select Committee, the NCVO says there has been a move in government toward larger contracts and cheaper prices, rather than quality and value for money. It argues that this is damaging the voluntary sector’s ability to win tenders.
It expressed its misgivings about a movement toward payment by results as the preferred method of contracting, despite a lack of evidence for its effectiveness.
"Payment-by-results approaches are a particular concern for the voluntary sector," the response says. "Most voluntary sector organisations cannot participate, as they cannot wait for payment. Charities that are involved, as subcontractors to primes, have had mixed experiences so far. These issues must be addressed urgently."
The response says that better commissioning is the key to improvement. "Good commissioning involves public bodies consulting people properly about services, engaging with and developing the supplier market and considering social value – all before getting to the procurement stage," the response says. "The government must redouble its efforts to improve commissioning and support commissioners."
The response says that the amount of grant funding for charities is falling, but that grants are often the most effective way to commission charities, particularly at a local level.