FBE ponders loss of Futurebuilders contract

Futurebuilders England "underestimated the disadvantage of being the incumbent" in its unsuccessful bid to keep its Government contract, the FBE board will be told today.

The board is meeting to assess what it can learn from the Government’s recent decision to award the contract for the £215m Futurebuilders fund to the rival Adventure Capital Fund.

In a report to today’s meeting, FBE chief executive Richard Gutch points out that, under the rules of the procurement process, FBE could be given no credit for its track record in the four years it has run the fund.

Gutch’s report says: “It was much harder for us to be radical, for example in terms of staffing structure, cost reduction and processes, because we know what is involved and have vested interests in our staff.

“We know that the Government’s intentions for the Futurebuilders fund have changed since its inception in 2003 and particularly as control of the fund has moved across departments and individual civil servants.

“We, perhaps wrongly, were too wedded to the original philosophy and did not agree sufficiently enthusiastically with, or respond sufficiently positively to, the client’s new aims – unlike the ACF.”

The report gives credit to the ACF for “some high-quality people and imaginative proposals” and notes that its chief executive, Jonathan Lewis, has a lot of experience of successful takeovers in commercial television.

It concludes: “Underlying many of these points is a potential ideological difference between FBE’s more considered approach to the role of the third sector in public service delivery (similar to the NCVO position) and a more aggressive approach (similar to the Acevo position). Perhaps the Office of the Third Sector was looking for more of the latter?”

The Futurebuilders fund gives loans and grants to voluntary organisations to help them bid for public service contracts. Under FBE it has distributed £108m to 247 organisations.

A 2006 report by the National Audit Office said that FBE’s level of engagement and support for investees was “exceptionally high and has the potential to make a real difference to the success of the projects”.

The ACF, chaired by Acevo chief executive Stephen Bubb, was due to sign the contract for the next stage of Futurebuilders yesterday and will meet the 45 existing staff shortly to discuss the future.

Under the new contract, which will run from April, there will be targets not for the number of investments by Futurebuilders but for the number of contracts won by investees.

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