Expert View: How mergers streamline the market

Partnerships and mergers mean pooled resources and talent - good news for service-users.

A Public Administration Select Committee report recently welcomed the sector as a significant player in the delivery of public contracts (9 July, page 1).

A big factor in the distinctiveness of what the sector can bring to public service delivery is its ability to build partnerships that are more effective than single organisations. It also makes sense for small charities to work with larger, like-minded organisations that can provide the governance and infrastructure to make effective bids.

Don't get me wrong: the voluntary sector can be every bit as competitive as its profit-driven counterparts. But its organisations can - and do - work together to deliver for their clients. There will always be a need for small organisations with local knowledge, but in most areas of service provision there will be a number of organisations doing similar things. In this cost-conscious market, success increasingly requires hard-headed business sense as well as good outcomes for clients.

Mergers take traditional partnership working a stage further. They are not only about savings and market share - they are also about streamlining a crowded market to put the service-user at the heart of delivery. Mergers of medium-sized organisations can result in powerful pooling of talent and resources. Trustees need to be on top of this and understand how an open approach to partnerships and mergers can contribute to the success of the people the sector serves.

We are seeing a growing appetite for mergers in the sector. Recent examples include Rainer merging with Crime Concern, and Age Concern with Help the Aged. Different mergers have different characteristics. When private organisations get together, the focus is generally on structure and maximising profit. For not-for-profits, it is about merging values - the service-user comes first, not the shareholder. This, underpinned by a social enterprise ethos, makes for business-minded organisations driven by ethical objectives.

- Andrew Webster is chair of Turning Point

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