Councils should not offer charities three-year funding agreements, but should "commission and decommission at will", the deputy chief executive of Manchester City Council told charities yesterday.
Speaking at the Charity Finance Group Northern Conference, Geoff Little said he had spent 15 years fighting for rolling three-year contracts but had recently changed his mind.
Little said that local authorities were focusing on a more unified approach involving more early intervention, and more integrated services between public bodies. As a result, councils need to take "a much more sophisticated approach to commissioning charities".
He said a council must be able to commission the services it needs from charities, when it needs them. "If you’re a big voluntary organisation you can cope with that," he said. "If you’re a smaller charity, can you deal with that type of world? I’m not sure."
Little also said there were other changes in the way public services in Manchester operated that would create opportunities for charities but also require them to work differently.
"We’ve been looking at things such as community budgets, social impact bonds and payment by results," he said. "There’s an opportunity for charities to play a leading role. A lot of this is about bespoke services and voluntary organisations are better at this."
Little said Manchester had been adopting a "multi-agency approach" to working with families with complex needs.
"At the moment you have all sorts of agencies visiting these families," he said. "But they are all missing each other. The provision of service is more complex than the needs."
He said a randomised control trial conducted with 480 families found public bodies could get significantly improved results with a unified approach.
He said charities should accept they could do more good as part of this kind of unified programme, but sector organisations were often reluctant to join.
"If you are trying to help people with mental health problems in a place, you will achieve more if you work with other organisations than if you try to work by yourself," he said.
He said that charities might have to change the beneficiaries they focused on to fit in better with a unified local government approach.
Little also said that he was "trying to encourage consortia" among charities to help them work more effectively to deliver public services "but we haven’t had much success" and "the jury is still out on whether they will have to engineered".
Kevin Curley, a trustee of the Charity Finance Group and chair of the conference, told the conference he disagreed with Little.
"Geoff Little’s proposals would destroy the ability of the voluntary sector to meet need and to plan for the medium term," he said. "They contradict several pieces of legislation, including the Social Value Act, which, incidentally, he had never heard of."