Analysis: Where can the voluntary sector find cash to compete for major contracts?

Most organisations will be disappointed at the assistance on offer, says John Plummer

It's difficult to think of many third sector organisations that could realistically compete against private companies such as Serco and A4E for Work Programme contracts.

The start-up costs associated with such large contracts are likely to be too great, particularly as payment by results means any return on investment will not come until later.

Experienced welfare-to-work providers such as the Shaw Trust and the Wise Group could compete, as could the new bidding consortium 3SC - but few other third sector organisations spring to mind.

The closure of the government loan fund Futurebuilders has turned off one of the main funding taps for organisations seeking to finance bids.

Anyone looking to the planned Big Society Bank is also likely to be disappointed: compared with what is needed, the bank's anticipated start-up funds of £60m to £100m seem insufficient. Furthermore, the contracts will have been awarded by the time the bank opens next year.

Employment minister Chris Grayling maintains that charities can look to ethical investors and financiers for backing.

He says he is "cautiously optimistic" that City financiers will invest after he and welfare reform minister Lord Freud held meetings with them.

It seems that unless third sector organisations are used to bidding for huge contracts, they had better make friends in the City soon - or their role in government welfare projects could continue to be limited primarily to subcontracting.

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