Public bodies must commission services better so that voluntary sector groups find it easier to win contracts and public services are not provided by an "oligopoly" of large, national and international providers, according to Francis Maude, the Cabinet Office minister.
At a meeting yesterday of the Public Administration Select Committee as part of its inquiry into the big society, Charlie Elphicke, the Conservative MP for Dover and Deal, asked Maude how voluntary sector organisations could be given a fairer chance when bidding for contracts from local and central government.
Maude said: "That is an important question and one that has not yet been got right."
"It is too easy to do risk-averse big contracts with minimum turnover requirements, which exclude a lot of smaller providers," he said. "You end up with an oligopoly of big, national and international providers, which is not what we want to see."
He said smaller contracts were part of the solution and procurement processes should be less onerous.
"A big national charity told me recently that it had cost them £800,000 just to bid for a local authority contract around one of the big services," said Maude. "This situation is a nonsense. We need to be much better at commissioning in a way that does create a genuinely level playing field."
Elphicke asked Maude what he thought the role of profit-making companies in the big society should be. "There are key roles for profit-making companies in providing public services," Maude replied.
"The situation is not universally perfect but that is because we need to get better at commissioning and managing contracts."
Labour MP Paul Flynn told Maude should stop talking about its big society agenda.
"The big society was the holy grail and the great crusade of the Prime Minister," he said. "There is a whole junkyard somewhere where phrases such as ‘the third way’, the ‘cones hotline’ and ‘back to basics’ are buried," he said. "It should join them there."
Maude told Flynn: "I think you start from a deeply partisan position and a deeply cynical position, and I think you are wrong."