Minister hits out at underbidding

Charities minister Fiona Mactaggart has hit back at voluntary sector criticism of the Government's under-funding of public service contracts, saying charities themselves are partly to blame by under-bidding.

And she advised charities to spend more on the bidding process, even if that meant cutting back on services to clients in the short-term.

Speaking to delegates at the Action Planning/Acevo Funding the Future conference in London last week, Mactaggart said the voluntary sector had to be more professional in its bidding in order to compete effectively with the private sector.

"Guidance alone cannot get (statutory) funders to change procurement practices. We also need to see the sector stop under-bidding," she said.

"Because of the habit of the begging bowl and under-investment, we don't invest in the same way as the private sector in these things.

"In the commercial sector, they front-load investment in the bidding process to guarantee their chance of getting a contract. It is a terrifying thing that you have to leave a group of clients, but that is what you may have to do."

Mactaggart said growing voluntary sector delivery of public services was not an attempt to get services on the cheap, but because charities were often better at delivering frontline services than the state or the private sector.

The £200m government investment in voluntary sector infrastructure through Changeup and Futurebuilders would help organisations to bid more effectively.

Mactaggart added: "People who do procurement don't often get out of their cupboards; they are not specialists in service but in procurement. The Government spends billions more on procurement than it gives in grants, so the sector needs to know exactly how much a thing costs."

But a local hospice manager told the minister that organisations had no choice but to underbid: "I'd like to invite you to a meeting with my primary care trust commissioner ... I'd like you to come out of your cupboard."

Mactaggart said the Government planned to tackle red tape in contracts by piloting a "lead funder" project that would ensure that even if a voluntary organisation was funded by various parts of government, it would have an accounting relationship with only one.

She cited one contract where by a voluntary organisation had to provide 900 different pieces of information to the four statutory bodies involved in the contract. "I will commit to try and cut that, if you commit to stop underbidding on contracts," she said.

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