Charities and social enterprises in contract delivery | Big Society Capital

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Charities and social enterprises in contract delivery

Public service markets are a key source of income for charities and social enterprises. Social investment can help them access these markets, and grow and scale their social impact through delivering key public sector contracts.

In a time of austerity, commissioning and procurement practice require delivery organisations with greater scale, delivery efficiency, and evidence-base of delivering outcomes.

This is a critical time for social enterprises and charities, and Big Society Capital is committed to supporting them to increase their participation in public sector markets. We will do this through our investments and in our role as a market champion to address barriers organisations may face.


Why is supporting charities and social enterprises to compete for public sector contracts important for Big Society Capital? 
  1. Government is one of the biggest payers for social outcomes through public sector contracts - meaning the potential scale of positive social impact is significant
  2. There is evidence that the sector can deliver additional impact in these markets through
  • a focus on the needs of beneficiaries
  • high levels of employee engagement and empathy 
  • ability to garner community support, and
  • reinvestment of surplus income into socially impactful activities.
  1. It is a significant source of income for charities and social enterprises. In 2013, nearly 30% of voluntary sector income came from government sources (£11.1billion), either earned through contracts or fees. It’s therefore a key contribution to their financial sustainability.

Current work

Over the next 6 months, we’re focussing our work on two areas within public service markets:

1)      The role of charities and social enterprises in meeting the opportunity presented within employment services through the Work and Health Programme and the joint Department of Health/Department for Work and Pensions unit announced in the Spending Review.

We’re particularly interested in hearing from:

  • Charities and social enterprises bidding as prime providers
  • Joint ventures between private sector and charity and social enterprise providers bidding as prime providers
  • Combined authorities who have employment services included in their devolution deals and want to explore how social investment can help create a more diversified provider market

2)     The role of charities and social enterprises in health and social care public service markets. We're currently scoping the market to better understand what the key barriers facing providers are, what opportunities exist and how capital can act as an enabler.

We’re particularly interested in hearing from:

  • Charities and social enterprises bidding as prime providers
  • Consortia and joint ventures between public, charity & social enterprise and private sector providers.

We’re keen to participate in the debate around public service reform and the role of charities and social enterprises. Christine fed into ACEVO’s Remaking the State Report from the Commission chaired by Rob Owen and Will Hutton. It called for a re-casting of the social contract between public services and the country’s most vulnerable citizens.

 

Christine also spoke on a panel about new approaches to integration and collaboration in public service markets as part of a series of events organised by the Institute for Government, sponsored by the Business Services Association. The series is titled "Where next for public service markets?" and explores how the government can develop the right mechanisms and skills to best manage public service markets in this Parliament. You can watch Christine share some of the lessons learned on this topic in this video - New approaches to integration and collaboration in public service markets.


More information

Criminal Justice

We had first-hand experience on the challenges faced by the sector in bidding for public sector contracts in the Ministry of Justice’s Transforming Rehabilitation programme procured in 2014. After only 1 social sector-led bidder out of 21 bidders was awarded a contract, we shared our learnings on how commissioners can help make programmes a more level playing field for charities and social enterprises:

Employment Services

As the Department for Work and Pensions embarks on the design of its new Work and Health Programme and, in partnership with The Department of Health and The Work and Health Unit, we have made some recommendations:


Contact

Christine Chang | Senior Director, Investment