Focus: Finance and Governance - Outlook - A guide to how the other side sees us

Chris Harris, finance director at Action for Blind People

Charities are getting involved in more and more contracts. The Government is being exhorted to increase the volume of public services provided by the third sector, so it is an area that few can ignore.

I am chairman of the charities group at the Chartered Institute of Public Finance and Accountancy, and our recent publication, the CJC Guide to Buying from the Third Sector, is a guide that enables charities to see how local authorities see us.

Here are some questions charities should ask themselves about contracts, with answers based on the guide.

Have you an agreed funding strategy? Charities do have options on funding that are not open to the public sector. It is appropriate to subsidise a contract if, by doing so, the beneficiaries get a better service - or a service at all. Some might say donors will refuse to give if they know subsidies are being made, but many charities manage to combine both.

Can you provide extra value to a funder? Funders will only pay if they share your vision and objectives, so communication is important.

The contracting process is a pain for public funders, so do your best to help them with their forms.

What are your priorities? My charity does not want to have to close a service at short notice because a statutory funding stream has come to an end. Others may consider a particular quality of service as all-important.

Knowing your priorities helps you to be clear about saying no to a contract.

What is your unique selling point? Third sector providers are seen as having a close focus on their fields rather than the distractions of wider political issues, a freedom of operation to achieve best value, close involvement with vulnerable groups and the ability to bring in other funding streams unavailable to the public sector. We need to identify what we are good at and work with the funder to ensure the contract recognises these.

What about the legal issues? The CJC guide says: "Neither European Union nor UK law stops authorities making fruitful use of the third sector. The constraints of EU law are, however, sometimes seriously exaggerated."

There is a statutory difference between buying and supporting. 'Buying' implies all the normal rules regarding competition, with no exemptions for the third sector. 'Supporting' can be a grant with no strings attached - but if there is any performance element, it becomes contractual.

Is there a 'market' for your services? There are many ways in which a public body can stimulate a market for services provided by the third sector. This may seem far from current experience, but public procurement can and must improve.

KEY POINTS

- Charities are becoming more involved in the delivery of public services

- The contracting process can be a pain for public funders, so charities should try to help them with the forms

- Charities should also be clear about what their unique selling points are.

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