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Jan 26

Commissioning post-Carillion: Keep it Local

Keep it Local, Localism, Policy

Be in no doubt: the outsourcing of government contracts to large companies clearly unsuitable to deliver them – like Carillion – has to stop. This happens at all levels of government and Locality has argued time and time again that this practice leads to poorer quality services and worse value for money.

As we argued in our landmark report from 2014, Saving Money by Doing the Right Thing, scale and standardisation in the procurement of public services actually leads to diseconomies of scale – public services delivered in this way generate ever more ‘failure demand’, resources are diverted to unproductive ends, and costs are driven ever upwards.

This mustn’t be about retreading the same old ground of a political debate fixated on public versus private. The complex, 21st century public policy challenges we face deserve much more.

People power

This week, I was at the launch of our Commission on the Future of Localism’s People Power report, where an audience member, Jim Minton, CEO at Toynbee Hall, raised an important point. He suggested that the Carillion crisis represents an opportunity for those who believe in the power of community to highlight the role local organisations can play in tackling knotty social issues – such as social care in an ageing society or long-term unemployment – that cut across traditional policy silos.

Indeed, many community organisations are already plugging the gaps in service provision left by the budget cuts of recent years, made more pressing by rising demand. Innovative local authorities, such as the oft-cited Preston, but others like Calderdale and Dorset have altered their procurement and commissioning practices in order to harness the power of these community organisations, recognising the additional social value these groups put at the heart of their service delivery.

Keep it local

Through our Keep it Local campaign, we have been working with six local authorities – including Calderdale and Dorset – to look at ways in which commissioning can create more responsive services that reduce costs, invest in the local economy and build stronger communities. Our most recent report as part of this work, Powerful Communities, Strong Economies, demonstrates that an approach to commissioning that seeks to maximise the potential of community organisations boosts local economic development by keeping procurement spend circling around the local economy.

However, challenges remain. For example, cuts are both enabling and preventing change. Local authorities have a pressing need to reshape service delivery to achieve savings, and there is an increasing urgency behind the search for new solutions. But continuing austerity makes achieving this change very difficult in practice, with council officers under huge pressure, and limited time and capacity to trial new approaches. Our Keep it Local work over the coming months will seek to work both locally and nationally to see how some of these challenges might be overcome.

A Smith Institute report published this week, Out of Contract, which assesses the future of outsourcing, highlights the role of social enterprises, cooperatives, and voluntary and community sector organisations in the commissioning landscape:

“[They] have major roles to play in service delivery. But with the rise of competitive tendering the state has come to regard charity and social enterprise as little different from business – missing their wider social significance… They can reach and involve communities and people alienated from or missed by public bodies.”

At Locality, we absolutely agree. We want to add our voice to the calls made by NLGN and CLES made in recent days: let’s use the Carillion debacle to recognise the power of local organisations and innovative local authorities, and ensure the national debate over the coming months doesn’t overlook the vital contribution of our voluntary and community sector.

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