"More questions are being asked about financial viability"

The collapse of Carillion has created a more challenging environment for organisations that deliver public sector contracts. Mark Moody, chief executive of Change, Grow, Live, tells Liam Kay that this is not necessarily a bad thing

Mark Moody
Mark Moody

First, Carillion spectacularly went under, taking millions of pounds with it. Then Capita admitted it was experiencing its own financial woes. It has not been a great year for large-scale public contracting.

The difficulties experienced by such behemoths of the public sector contracting world have understandably led to questions about the sustainability of large charities heavily reliant on government contracts.

However, Mark Moody remains optimistic about the future of public sector contracting in the charity space.   

Moody is chief executive of the social care and health charity Change, Grow, Live. In 2017, it had an income of almost £156m, most of which came from running drug and alcohol services on behalf of local authorities.

"I haven’t seen any reluctance to award [contracts]," he says. "But I have seen a few more-to-the-point questions about financial viability, which I think is quite right. "If something goes belly up, the people who will suffer are those who rely on the service. If a charity fails, I’m not sad for the charity as much as I am for the people who rely on the services that the charity provides."

The organisation has grown substantially in recent years. When Moody first joined the charity in 2000 it employed about 40 people. It now has 2,527 staff.

In order to thrive, Moody says, CGL has had to become more selective with the contracts it bids for and focus on those areas it believes it can run really successfully.

Ability to focus

Moody attributes its success in winning contracts to its ability to focus on the specification of what is being tendered. He says that sometimes charities focus too much on trying to deliver the service they wish was available, rather than the one that is actually being outsourced.

"It’s like an exam question – you should answer the question that is being asked, not the one you wish had been asked," he says. "And if what’s being asked doesn’t suit your organisation, you should just leave it alone."

CGL also concentrates on delivering high-quality services for beneficiaries.
Being a charity has helped because it has no shareholders to take a cut of its income.

Impact measurement and evidence are now crucial to retaining contracts, says Moody. "We have been very good at demonstrating the impact we have and showing how that translates to a service we are bidding for," he says.

He adds that charities need to demonstrate that they are best placed to run the services for people who need them.

"We’ve rarely been awarded contracts because we’re the cheapest," says Moody. "Things cost to provide what they cost to provide. I’d remove the cost element from tendering if I had the choice, because that could drive a race to the bottom."

Get the best service

Commissioners have been criticised for favouring larger charities or the private sector at the expense of smaller charities, but Moody says it is the commissioner’s job to get the best service for the people who rely on it. "If they’re driven by the needs of the people who are going to get the service, I can’t really find a place to criticise that," he says.

people sat around a table

There are advantages for large charities in delivering large contracts, particularly in achieving economies of scale and having the necessary infrastructure to run public sector services. Moody says that, despite this, "it is not a matter of large charities being better than small charities, or vice versa". Smaller charities, he says, have their own advantages, such as specific local expertise compared with that of larger charities.

Moody believes that smaller charities have a crucial role to play in public sector contracting, especially the highly specialist ones or those that are embedded within local communities. Smaller charities can run specific services as part of a larger contract, he says, with support from a bigger charity that has the infrastructure and capacity.

And if those smaller charities have the necessary knowledge and skills, Moody says, a larger organisation would be foolish to not want those organisations to be part of its bid to run a service. "It all goes back to people who are commissioning to get the best outcomes for their beneficiaries," Moody says.

"For the smaller and specialist charities, perhaps they need a bit more targeting of larger organisations to show their worth, rather than just worrying about being swallowed up. I think we all have roles to play."

CGL is a charity operating in an area that is dominated by the private sector. Moody thinks that counts for something.

"I have met so many smaller charities that have things to offer," he says. "I think we understand what they offer better than what the previous funding arrangements were. We understand the trials and tribulations of working in this sector.

"I think the world has changed, but I don’t necessarily think it is all for the worse. As it happens, you are working with people who understand what it is to run a charity, to have a board, charitable objectives and interests."

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