Charities should be prepared to turn down contracts if they do not believe they can deliver good quality services for the money on offer, the House of Lords Select Committee on Charities has heard.
At an evidence session in parliament yesterday on larger charities and commissioning, which is part of its year-long inquiry into charity governance and sustainability, the committee also heard that charities needed to be careful to avoid losing focus on their mission when bidding for contracts.
Andrew Seager, head of service development at Citizens Advice, told peers that involvement in service delivery could give charities a unique insight into what changes were needed in a particular area and, depending on the effectiveness of the relationship with the commissioner, the ability to influence the service.
But he said there were some contracting opportunities where "the need can’t be met by the contract that’s on offer, and that’s the chance where you have to say no".
He said Citizens Advice had a "very robust approach" to whether to bid for a particular contract.
"And that takes a lot of confidence in today’s funding climate, as a charity, whether national or local, to say: ‘Actually, no – that’s bridge too far. We won’t end up delivering a good level of service to the individuals,’" Seager said.
It also required a strong understanding of the charity’s cost base and capability, he added.
"As a charity we need to be bold," he said. "Bold about saying no and just focusing on the individuals we are trying to help, staying true to that mission and not allowing that to drift."
Dan Scorer, head of policy and public affairs at the learning disability charity Mencap, agreed and said he had heard of many cases where charities were rejecting contracts that were being tendered by local authorities at rates the charities did not believe would allow them to provide safe, quality services.
"That is happening now and is affecting the quality of support that people are getting," he said.
Scorer said charities had to focus on whether contracts would deliver for their beneficiaries and their core mission.
"It can be easy if organisations take their eye off the ball to get involved in contracts that end up diversifying the people they’re working with, which is potentially not delivering to their core mission," he said.
Jacob Tas, chief executive of the social justice charity Nacro, said the issue was at the heart of the struggle charities were facing.
He said that in times of austerity, when there was less money available, trustees had to decide whether to chase the money or hold to their charitable objectives.
"Sooner or later it will backfire if you are chasing the money," Tas said. "You will get so widespread that it doesn’t all hang together any more."
The committee will hold its final evidence session this afternoon and will hear from Rob Wilson, the Minister for Civil Society, Mark Fisher, director of the Office for Civil Society, and William Shawcross and Kenneth Dibble, chair and legal director respectively at the Charity Commission.