The need to cut costs has led many local authorities to contract out services to large national providers that can deliver them more cheaply than local ones. But in Calderdale, West Yorkshire, one charity has seen off competition from national organisations to win a contract to run 11 children's centres and associated nurseries.
In April last year, Halifax Opportunities Trust, a community development charity, was awarded a contract worth £10.5m over three years to run the centres and nurseries in the central and upper valley areas of Calderdale. Barbara Harbinson, chief executive of the trust, says it was a daunting prospect. "We were scared because we were competing against these big national charities," she says.
HOT had run nine of the 11 children's centres before the tender, and thus had a track record of delivering the services.
But winning the contract would involve about 100 staff being transferred to it under Tupe arrangements - almost doubling its staff levels - and taking over the running of the nurseries, which were struggling financially after the loss of government subsidies.
Given the scale of the challenge, the charity applied for and won more than £60,000 from the Social Investment Business to help it put together its tender.
Harbinson says: "The money allowed us to carry out a competitor analysis, understand the risks of Tupe and write a proper tender. In the third sector, we tend to write long narratives about how good we are, but we don't necessarily answer the questions being asked."
The charity and the partners it appointed to help it prepare the bid spent time working through the tender document to ensure they had answered the questions in a way that helped the charity score as highly as possible. Harbinson concedes, however, that tensions did arise. "We didn't like some of the language the partners wanted to use in the bid," she says. "In the end, however, we reached a compromise."
The contract tender placed an emphasis on the social value the provider could bring to an area; Harbinson says this helped the charity to win the contract because it was able to incorporate into its bid elements of its other work in areas such as employment. But she says the most significant factor was the creation by Calderdale Council of a contract that allowed local providers to compete with national ones: it divided its children's centre contract into two, which meant not only large organisations with deep pockets could apply. "The politicians were anxious that it should be an even playing field for local providers," she says. "The bigger the contract, the less likely it would be that a local provider could bid for it. Normally people have little good to say about local councillors, but in our case they understood what was going on."
Harbinson says local charities planning to bid for significant contracts should think carefully about whether they really want to take on the service, and should get help. "Bringing in additional support is useful for building up expertise," she says. "We learned so much from that contract that we can use in other ways." She says local providers can also influence how contracts are shaped before the tender phase by talking to politicians and council officers about their concerns and making sure contracts comply properly with procurement rules.
Nine months after securing the contract, Harbinson says council funding continues to cover the running costs of the children's centres, and it is attracting more parents who pay market rates for nursery places. However, she remains cautious. "Winning was a great outcome, but it's a three-year contract," she says. "Who knows what the situation will look like for public sector spending in the future?"