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How public bodies can help small charities during commissioning

Jack HunterJack Hunter, a researcher at IPPR North, looks at how smaller charities are faring in the current climate, and how they can be helped to serving their communities.

Sometimes, as the song goes, you don’t know what you’ve got ‘til it’s gone – and unless public leaders change the way they commission services, we’re at real risk of finding out what society will look like without  a vast swathe of vital smaller charities.

It’s difficult to put a price on the work smaller charities do that larger organisations can struggle with – but we all know it when we see it.

It could be helping highly vulnerable people who are wary of mainstream public services. It could be individuals working in communities to address sensitive issues like abuse or extremism where trust is paramount. Or it could be great local groups that know every cobblestone in their patch.

Small and medium-sized charities form an essential part of our society and provide great public services for all communities.

For instance, the Inspire Centre in Levenshulme – an inner city neighbourhood south of Manchester city centre – runs a local work club which has helped nine people into work in the past six months; provides activities for over 100 isolated older people every week; and has to turn people away from its over-subscribed ESOL classes. And yet none of these services are properly commissioned and are run on a mix of ad-hoc grant funding and volunteer support.

But IPPR North’s research paper, Too Small To Fail, this week warned that these charities – specifically those with incomes between £25,000 and £1m – face a double whammy of rising demand and a sharp reduction in government income.

This sits alongside NCVO research, also published this week, which showed that charities with an annual income of under £1m have lost between 34% and 38% of their government income, with smaller charities particularly hard hit.

And the closure of small charities hits society’s most vulnerable hardest.

Since 2010, the nature of public service delivery has changed significantly, with a shift towards the use of competitive commissioning models in which all types of provider compete to deliver public services.

Our report also shows that there is compelling evidence to suggest that large organisations, including some large charities, are increasingly dominating the market for public service provision, to the detriment of small and medium-sized organisations.

While charities should resist becoming overly-reliant on government funding, our report shows that there is lots public leaders can do to improve their commissioning, despite their own funding pressures, and so help these vital organisations continue to help the those who need it:

  • The NHS and local authorities should be better held to account for the ‘social value’ of the services they commission – making sure that when procuring services, they fully appreciate the unique strengths of smaller players and adopt commissioning practices that enable small charities to bid.
  • Councils could also develop a locally determined framework for commissioning small charities, including, where appropriate, long-term grant funding for small local organisations. For instance, the London Borough of Camden has developed a locally determined framework for small charities commissioning, including a dedicated pot of long-term funding for small local organisations.
  • Central government should extend its current policy of buying-in services from small and medium firms, with a similar pledge to cover small and medium-sized charities.
  • And from the other side, umbrella bodies and private funders must also help small charities develop their skills in tracking their impact.

As our report shows, these relatively small changes could reverse the threat to the role small and medium-sized charities play in providing excellent services for all – and so help the small charity sector not only survive, but thrive.

The ‘Too Small to Fail’ report is part of the Future of Civil Society in the North (FSCN) – a three-year programme of work by IPPR North on the state of civil society and the voluntary sector in the north of England.


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