Christine Chang, Investment Director of Big Society Capital, is the latest to set out her top priorities for the new Justice Secretary, Michael Gove in the current guest blog series. You can follow @BigSocietyCap on Twitter.
The value of charities and social enterprises
If I were Justice Secretary I would update procurement practice to align with the ambition of charities and social enterprises playing a key role in delivering criminal justice services.
Charities and social enterprises have a lot of value to bring in the future criminal justice system, building on the deep knowledge and experience they have gained from the work they have already done. And while an increasing number of corporates delivering public services are working to embed social values alongside their traditional aims, charities and social enterprises are already intrinsically driven by the best interest of their beneficiaries, and consequently not profit driven.
However, the perennial challenge for charities and social enterprises is that they tend to have small reserves in comparison with other providers, and be operating at a smaller scale. Therefore there are four things I would address in procurement practice to enable their participation:
- Carefully consider the amount of resources and time required to bid. Provide real support and engagement across the provider market well before procurement begins. That ensures all bidders are equally prepared, and then the best provider can be selected.
- Rethink the balance of quality vs. price in bid evaluation. This could be done by setting a standard price against which bidders are asked what they can deliver for that price (removing the issue of smaller organisations who can’t deliver multi-lot bids from being undercut by larger organisations benefitting from economies of scale, whilst still ensuring value for money for the taxpayer). It could also be done by scoring quality of bids, making sure evidence-based solutions are given appropriate weight and are able to genuinely distinguish themselves.
- Reduce the barrier of the parent company guarantee. Charities and social enterprises tend to have smaller reserves. This means that, where a guarantee is required, they will have to go out to third party providers for additional capacity. These third party providers don’t have ultimate control over the provider like a parent would, so they can’t provide a blank cheque. They need to understand the extent of the liabilities they’re signing up for and how likely events are to happen that call on the guarantee. Like a parent acting as guarantor for their child who’s a first time homebuyer, they would have early warning signs for when things are going wrong and have the control to get them back on the right track, which a third party can’t do.
- Be clearer up-front about what organisations are appropriate to deliver for a given contract, so that organisations can exclude themselves early on. It is really costly and time consuming both for an organisation to prepare a high quality bid proposal and for the Department to work with bidders and evaluate bids, so it would be more efficient for all involved to say so at the outset.
Procurement is never the most exciting or headline-grabbing of areas. But these changes would not only help diversify the supplier base, but ultimately help to achieve the best outcomes for society.
The purpose of this blog series is to stimulate a debate about where our criminal justice system should be heading. I’d love to hear your thoughts on what the justice priorities should be. Please use the comments section below or follow the conversation on Twitter, using the hashtag #nextGrayling
