Commissioning and its impact on small charities

More and more of my discussions with clients are about the challenges they face engaging with commissioners. Bidding for contracts is not new to the sector, but the latest changes in government funding and new commissioning models are having a major impact on voluntary organisations and smaller charities. Shortfalls in statutory funding are leading organisations to use reserves to subsidise activities, while also freezing staff recruitment and putting service development on hold.

According to NCVO, over a third of income into the voluntary sector comes from the state. Relationships between the voluntary sector and the public sector are often defined by the commissioning process. Where grant award historically enabled service delivery, significant changes in public spending and accountability issues mean that services are increasingly being delivered through contracts.

I’ve observed a real shift within health, social care charities and hospices. CCGs are driving to improve efficiency and ensure continuity of services by commissioning to a single provider.

Working in partnership or consortia is now recognised as an essential part of successful operations. Guy Stevenson, Chief Executive Officer of Age UK Bexley, says “The increasing need for collaboration and partnership is a point of real challenge for many community based agencies, in terms of them adapting into a developing contractual and strategic environment. Retaining a positive client focus, whilst readying ourselves for a changing market shape, will only add to these challenges.”

Diane Gardner, Chief Executive of Sobell House Hospice Charity, comments, “The challenge here is to ensure these new commissioning methods put good patient centred care at the heart of the proposal, in a way that is sustainable and recognises the complementary strengths that each organisation brings to the table.  It is for existing providers, who already know their clients, to work together to integrate services. There are not many previous examples to build on and so, understandably, the collaborating organisations need to move with purposeful caution.”

We know small and medium sized charities are not alone in the challenges they face; commissioners are also facing a tough time. They are dealing with tight budgets and fewer resources, whilst trying to balance meeting their financial targets with ensuring services are available to meet communities’ needs. However, the Government, the NHS, CCGs and local authorities need to ensure fair and sustainable funding for local charities. Greater joint working at a local level, and an increase in a ‘place-based’ approach to commissioning, should result in the development of more integrated systems of care, especially between health and social care. It is all about working together for greater good.

Sandra Hamovic is a Partner in the Not for Profit practice.