Letting contracts for successful delivery by the voluntary and community sector Voluntary Sector Excellence Project, Estonia Richard Gutch, Chief Executive, Futurebuilders England Friday, 12 November 2004

Outline n Summary of Background n Futurebuilders n Voluntary and Community Sector Examples n Government (Purchaser) Perspective

Summary of Background n Increase voluntary and community sector public service delivery n Added value -focus on users -independence -knowledge, expertise, experience – reach -flexibility, innovation n Treasury Cross Cutting Review (2002)

Summary cont n Barriers to VCS public service delivery -access to finance -skills and systems development n Barriers 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 n Run by a voluntary sector consortium n Mix of loans, grants and capacity building n Increasing sector’s capacity to deliver public services n Community cohesion; crime; education and learning; health and social care; support for children and young people

Example 1 – Asian Group n Investment of £300k to develop provision of day-care to elderly Asians n Very little provision compared with other elderly people n Social services priority

Example 1 – Asian Group n Investment package -Grant to employ a manager -Part grant / part loan to train existing staff and volunteers -Loan to purchase a vehicle and new IT -Capacity building grant for new IT and finance system n Contract with social services covers loan repayment / interest

Example 2 – Rural Community Association n Investment of £500k to develop a range of services for a dispersed rural area n Health, social care, advice, adult education, youth work, training – all highlighted in community plan

Example 2 – Rural Community Association n Investment package -Loan to purchase and improve local community centre (two year interest / repayment holiday) -Grant to plan and develop range of services -Loan to provide working capital for employing and training staff -Capacity building grant for organisational development support, including securing contracts n Contracts with LA/PCT/LSC/Job Centre Plus/Legal Services Commission

Example 3 – National Charity n Investment of £2M to complete development of a £10M specialist residential centre n Bed spaces to be purchased by a range of PCTs n £8M commercial loan available secured against the building n Need a 3 year loan for missing finance n Futurebuilders takes the risk n Once building completed and filled, risk has been reduced n Futurebuilders provides capacity building grant to help with marketing to PCTs and working capital loan for staff set-up n Futurebuilders assigns its loan to commercial bank

Government (Purchaser) Perspective n Community Plan / Service Plan -identify needs -public service priorities -potential for VCS delivery -consult with VCS n Service specification -quality, as well as quantity -special features required (Added Value) -outputs and outcomes, not inputs

Government (Purchaser) Perspective n Accessible tendering processes -size of contracts -complexity of process -‘meet the purchaser’ sessions n Different types of tendering -competitive -negotiated

Government (Purchaser) Perspective n Content of the contract -full cost recovery -length -price; not line by line budget -shared risk n Capacity issues -for the purchaser -for smaller voluntary / community organisations -national / local partnerships -big / small partnerships

Government (Purchaser) Perspective n Contract management -keep transaction costs down -proportional monitoring -focus on outputs and outcomes -user feedback n Contract renewal -timely – in advance -agreed success criteria

Successful delivery of public services by VCOs means we need to:- n Develop the capacity of: -voluntary and community organisations to deliver -government to purchase Futurebuilders Demonstration Programme aims to help achieve this

Thank you