Last week, Chris Grayling told a meeting of the House of Commons justice committee that he wanted contracts in his department’s new payment-by-results probation scheme to be small enough for voluntary sector organisations towin them.
Then he spent ten minutes listing six or seven reasons why there was zero chance this would happen. Listening to him, it felt more and more likely that the probation scheme will have a small number of absolutely mahoosive contracts that will be very hard for any charity, even the very largest, to get to grips with.
For a start, Grayling said it would help administration if contracts shared boundaries with the Work Programme areas. Then he went on to say that commissioning large contracts was cheaper, and that there just weren’t the skills in government to commission lots of little contracts.
(He did add the probation contracts will be more friendly to voluntary sector consortia, and that they will try to guarantee a better deal for sector subcontractors, but I’m not holding my breath.)
I’ve spoken with a couple of local politicians recently who say many of the same things that Grayling said.
Public sector bodies, they said, feel they haven’t got time to individually commission loads of little voluntary organisations; they want to cut costs by commissioning at scale; they want a single point of contact with the voluntary sector; their political leaders feel that fewer, larger contracts allow them to centralise control in their own hands; and it requires fewer skilled commissioners to manage a single contract than a score of grants.
Added to this, there is a powerful commercial lobby which is fighting for bigger contracts.
Last month, I listened to a number of private sector procurement experts talk to the Public Administration Select Committee, and they were convinced that current contracts were just too damn small.
On the other side, there’s the voluntary sector, which is good at service delivery, but doesn’t have the scale and financial muscle to manage enormous contracts, arguing that contracts must be broken down so that it can get a fair go.
I’m not sure it’s going to work.
All the evidence above suggests that contracts will remain big, and that if nothing else changes, the sector will get beaten in the bidding process again and again by big private sector organisations that are worse at helping people but have a bigger balance sheet and a better history of supply chain management.
So the sector will have to change: build new, bigger organisations, develop structures that allow those organisations to take on capital; give those organisations boards focused on winning contracts and getting bigger.
In short, the sector is not going to get smaller contracts. It’s going to have to learn how to win big ones.