Procurement costs damage charities' service provision

7 August 2007
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08 August 2007 | Antony Barton

The delivery of public services "could be undermined" by the complex procurement and funding practices of local authorities, according to a report out today.

The research by the National Audit Office (NAO), Public funding of large national charities, shows the devolution of commissioning and procurement responsibilities to local public bodies, such as councils and hospital trusts, means many providers need to develop a complex network of relationships with hundreds of bodies. Developing and maintaining these costs money that could have usefully been spent on the provision of services.

Twelve large national charities examined by the NAO had up to 4,000 separate relationships with public bodies. On average, the groups estimated they spent around £400,000 a year managing these relationships.

Joe Cavanagh, director of business development at the NAO, said: "Large charities are important providers of some public services, but public bodies' funding arrangements are often unnecessarily complex and costly. Public bodies need to work together to bring coherence and consistency to their funding practices, to ensure that charities' valuable work is not hampered by bureaucracy."

The report added charities should develop staff expertise in public procurement to help them understand "the other side's perspective", including the rules public sector bodies need to follow.

It recommended the Office of the Third Sector and HM Treasury bring issues raised in the report to the attention of central government departments and other public bodies. It hoped this would ensure their commissioning frameworks reflect the principles set out in the cross-government action plan Partnership in Public Services: an action plan for third sector involvement. Departments should focus on local implementation and plans should include an assessment of the costs carried by charities, it added.



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