The umbrella body Locality has said it is "time to bust the myth that bigger is better" and called on the government to make it easier for smaller organisations to win public service delivery contracts.
Its call comes in a report published today as part of the launch of Locality’s Keep it Local campaign, which calls for public services to be run by local organisations rather than large private sector companies.
The report, Keep it Local for Better Services, says: "The false belief in economies of scale and standardisation of services is the problem, not the solution.
"Large-scale standardised services don’t solve people’s problems. They do lead to a drop in quality and a rise in costs."
The paper calls on the government to ensure that public service contracts are built around the needs of the local community and include a presumption that the contract will be delivered locally at the most appropriate size.
It says the government should legislate to ensure that no single supplier is able to take more than 20 per cent of a public body’s budget or have more than a 20 per cent share of a public service market.
The government should, it says, develop new measures to ensure equality of opportunity in all public service contracting and to remove any structural barriers that prevent community organisations from bidding.
The report says the government should make transparency a requirement of all public service contracting and delivery organisations should provide details about how they are fulfilling contracts and the social value that is offered.
Research carried out by the polling company YouGov for the report found that 72 per cent of people though public services should be run by locally based organisations.
It found that 32 per cent of people felt that public services were not meeting all their needs, and 83 per cent feared that some public services would cease to exist or would no longer be free of charge.
Tony Armstrong, chief executive of Locality, said the system for contracting out public services was letting people down.
"Our polling results show overwhelming support for our Keep it Local campaign," he said. "People are fed up of their taxes being pocketed by massive national companies that give them a tawdry deal.
"They don’t want one-size-fits-all services provided by large organisations that work across huge swathes of the country. They want community-focused services designed and delivered at a local level by people who know them and can give them what they need. It’s time the government put communities at the heart of public service commissioning and delivery."