Letting contracts for successfuldelivery by the voluntary andcommunity sector
Voluntary Sector Excellence Project, Estonia
Richard Gutch, Chief Executive, Futurebuilders England
Friday, 12 November 2004
Outline
nSummary of Background
nFuturebuilders
nVoluntary and Community Sector Examples
nGovernment (Purchaser) Perspective
Summary of Background
nIncrease voluntary and community sector publicservice delivery
n Added value
-focus on users
-independence
-knowledge, expertise, experience – reach
-flexibility, innovation
nTreasury Cross Cutting Review (2002)
Summary cont
nBarriers to VCS public service delivery
-access to finance
-skills and systems development
nBarriers to effective contracting by purchasers
-‘grants’ mindset
-insufficient full cost recovery
-length of contracts
-‘risk’ not shared
Futurebuilders
n£125 million Home Office backed investment programme
nRun by a voluntary sector consortium
nMix of loans, grants and capacity building
nIncreasing sector’s capacity to deliver public services
nCommunity cohesion; crime; education and learning; health andsocial care; support for children and young people
Example 1 – Asian Group
nInvestment of £300k to develop provision of day-careto elderly Asians
nVery little provision compared with other elderlypeople
nSocial services priority
Example 1 – Asian Group
nInvestment package
-Grant to employ a manager
-Part grant / part loan to train existing staff andvolunteers
-Loan to purchase a vehicle and new IT
-Capacity building grant for new IT and financesystem
nContract with social services covers loanrepayment / interest
Example 2 – Rural Community Association
nInvestment of £500k to develop a range of servicesfor a dispersed rural area
nHealth, social care, advice, adult education, youthwork, training – all highlighted in community plan
Example 2 – Rural Community Association
nInvestment package
-Loan to purchase and improve local communitycentre (two year interest / repayment holiday)
-Grant to plan and develop range of services
-Loan to provide working capital for employing andtraining staff
-Capacity building grant for organisationaldevelopment support, including securing contracts
nContracts with LA/PCT/LSC/Job Centre Plus/LegalServices Commission
Example 3 – National Charity
nInvestment of £2M to complete development of a £10Mspecialist residential centre
nBed spaces to be purchased by a range of PCTs
n£8M commercial loan available secured against the building
nNeed a 3 year loan for missing finance
nFuturebuilders takes the risk
nOnce building completed and filled, risk has been reduced
nFuturebuilders provides capacity building grant to help withmarketing to PCTs and working capital loan for staff set-up
nFuturebuilders assigns its loan to commercial bank
Government (Purchaser) Perspective
nCommunity Plan / Service Plan
-identify needs
-public service priorities
-potential for VCS delivery
-consult with VCS
nService specification
-quality, as well as quantity
-special features required (Added Value)
-outputs and outcomes, not inputs
Government (Purchaser) Perspective
nAccessible tendering processes
-size of contracts
-complexity of process
-‘meet the purchaser’ sessions
n Different types of tendering
-competitive
-negotiated
Government (Purchaser) Perspective
nContent of the contract
-full cost recovery
-length
-price; not line by line budget
-shared risk
nCapacity issues
-for the purchaser
-for smaller voluntary / community organisations
-national / local partnerships
-big / small partnerships
Government (Purchaser) Perspective
nContract management
-keep transaction costs down
-proportional monitoring
-focus on outputs and outcomes
-user feedback
nContract renewal
-timely – in advance
-agreed success criteria
Successful delivery of public services byVCOs means we need to:-
n Develop the capacity of:
-voluntary and community organisations to deliver
-government to purchase
Futurebuilders Demonstration Programme aims to helpachieve this
Thank you