What the Government’s new Procurement Policy Statement means for small charities

Last week, the Government published a new Procurement Policy Statement. While adjacent to the Procurement Act, it is guidance that relevant contracting authorities should follow. This is good news for small charities because the statement encourages contracting authorities to maximise procurement spend with small and medium sized enterprises and VCSEs. That means local authorities should be looking for ways to make contracts more accessible to small and local organisations.

This new guidance is important because we know that small and local charities are often uniquely placed to deliver services that bring value to people facing complex issues, the local economy and wider community. However, too often small charities have been shut out from onerous commissioning processes that have favoured scale.

We’ve seen examples of organisations embedded in communities that have delivered local services for years losing out to large providers who have moved into the area and been unable to reach the people who need their support. That’s why we supported the Keep it Local campaign which encourages and supports authorities to work collaboratively with local organisations and has resulted in more than 17 local authorities and health bodies committing to closer working with local organisations.

Shifting culture and ways of working

Flexibilities within the Procurement Act mean contracting authorities are able to take a collaborative approach to commissioning. Throughout the development of the Act, we at the Foundation, alongside others, pushed for more focus on encouraging contracting authorities to use these flexibilities. They have been able to do things differently for some time, but we have consistently seen a reluctance among some contracting authorities to work in different ways, retreating to competitive processes that have made it harder for small and local charities to be awarded contracts.

This new policy statement provides that encouragement we were seeking. It makes it clear that working more flexibly isn’t just possible, it’s actively encouraged and should be prioritised. That’s an important step in helping to shift the culture and objectives of commissioning and procurement teams. We hope that this will lead to more commissioning and procurement teams making changes to ensure the commissioning process is accessible to charities, rather than using complex processes that are disproportionate to the service sought and challenging for small charities to engage with.

Our Purposeful Collaborations playbook is a useful tool that local authorities and charities can use to understand how they can do things differently under the new Procurement Act – and this new policy statement increases the onus on adopting these collaborative approaches. There are already some great examples from the Keep it Local network which are helping contracting authorities to secure better services for local people. Meanwhile, we’ll continue to advocate for small and local charities to be prioritised so that people facing complex issues can get the support they need.