Serco courts small voluntary organisations to help it deliver Flexible New Deal contracts

Company preparing to bid for eight government contracts

Services company Serco is looking for about 60 third sector partners to help it deliver Flexible New Deal contracts.

Richard Johnson, managing director of welfare to work at Serco, said the company was preparing to bid for eight contracts due to start in the autumn next year and expected to win Government business worth about £500m.

"We're currently deciding which subcontractors we will use if we're successful," he told Third Sector. "We expect to employ between 20 and 30 subcontractors in each region, and we expect about 30 per cent of those to be from the third sector."

Serco is one of several private companies seeking contracts from the Department for Work and Pensions in partnership with voluntary organisations, which sometimes lack the size and money to put in bids independently.

Johnson said Serco had developed a year-long process for working with jobseekers under the Flexible New Deal scheme and that the most difficult cases would be dealt with in the final 20 weeks of a year-long contract.

He said most of the company's third sector partners would be employed at that stage, when they were likely to be offered the highest rewards for each jobseeker placed in work.

Johnson said Serco valued the ability of third sector providers to handle small, hard-to-reach groups. He said some providers had moved away from this ethos to meet criteria for government funding.

"The contracting environment over the past few years has led organisations to offer more generalised services," he said. "I've spoken to a disability charity, for example, that previously focused only on one single disability, but now says it can handle more than 30 types of disability."

He said funding restrictions on the Flexible New Deal had compounded the problem of third sector providers moving away from working with specialist groups.

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