Government proposals to introduce 16 regional contract areas to deliver probation services are likely to limit almost all voluntary sector organisations to participating only in subcontracting roles, charity umbrella bodies have warned.
The Ministry of Justice proposed in January to contract out probation services for low and medium-risk offenders to private companies and charities. This could mean that responsibility for the rehabilitation of 200,000 offenders is transferred to the voluntary and private sectors.
In response to an MoJ consultation on the proposals, which closed on Friday, the chief executives body Acevo said that, instead of the proposed 16 contract areas, the department should introduce 37, which would broadly match the police and crime commissioner areas and make it easier for charities to take part.
Otherwise, the Acevo response said, voluntary sector organisations would be likely to find themselves limited to considering subcontracting roles.
"This is unsatisfactory," said the Acevo response, "as the programme would benefit enormously from the expertise and capacity for innovation of voluntary and community sector providers in prime contractor roles; subcontractor organisations have in the past faced difficulties in payment-by-results programmes, which might deter several VCS organisations from becoming involved.
"A 16-contract model might produce contracts of such size that even subcontractor roles are beyond the reach of many VCS providers."
The response from the National Council for Voluntary Organisations echoed Acevo’s concerns.
"While there are clear attractions to government both in terms of ease of management and reduced administration costs through the use of a smaller number of very large contracts, the experience of the Work Programme and the nature of organisations in the voluntary sector would lead to significant concerns," the NCVO’s response said.
"Contracts of this size inevitably limit the types of providers that will be involved; they can lead to a range of issues around supply chain management and can build in several layers of complexity between the commissioner and service users."
Acevo also called for charities to receive 80 per cent of any contract amounts as guaranteed service fees, with any payment-by-results element representing a maximum of only 20 per cent.
This would be "large enough to create a significant financial incentive to achieve high performance, while enabling a diverse range of providers to participate in delivery", Acevo said.
Clinks, a membership body for criminal justice charities, agreed with the 20 per cent maximum figure but said even that would represent "an unfeasible level of risk for many VCS organisations".
"Wherever possible, Clinks would recommend that subcontracted VCS partners carrying out discrete pieces of work should receive 100 per cent of their delivery fee up front and all outcomes-based risk should remain with the prime contracted partner," its response said.
The NCVO recommended that an "up-front contribution", in the form of a loan or grant, could be made to smaller organisations to enable them to take part – for example, to cover start-up costs.
"In the case of very large contracts, prime contractors should be encouraged to use other financial mechanisms to support the involvement of smaller providers – for example, risk sheltering or the use of grant funding to support specific interventions," the NCVO said.
"Prime contractors should be strongly encouraged to use as diverse a range of financial mechanisms as possible in the tendering process and should expect to be held accountable for their decisions, explaining how they have configured funding mechanisms to interventions."