Crown Representative for Voluntary, Community & Social Enterprises

1. Crown Representative for Voluntary, Community & Social Enterprises North East Social Enterprise Partnership - 28th June 2013 Michael O’Toole Crown Representative for VCSEs

2. Agenda • Crown Representative VCSE Role • Background • Strategic objectives for role • My priorities • Current state of VCSE sector in public services • VCSE offer • Key issues & challenges for VCSEs • Future opportunities & issues • How can we support

3. Background - Crown Representative for VCSE sector • New role created as part of Government’s commitment to enable charities and social enterprises to do more • Government wants to improve its relationship with VCSE sector, open up public services and diversify supply base • Build upon making it easier for more VCSEs to tender for public contracts and policies to enable capacity • Part of Commercial team but also working closely with OCS

4. Strategic objectives for the role • Open up more business to VCSE organisations, influence public sector commissioning and procurement • Build strategic dialogue between government and the VCSE sector • Provide strong VCSE voice at the highest levels and communicate key developments out • Open up public sector business to VCSEs, by: • Make it easier for more VCSEs to tender for public contracts – remove barriers • Decisive interventions on major commercial opportunities • Help VCSEs take services to the public sector market • Understand and develop VCSE skills and capacity to win and deliver public service contracts

5. My priorities • Engage with commissioners and VCSE sector – listen, filter, learn & disseminate • Understand development needs - build capacity and support change for VCSEs • Demonstrate good practice and case studies • Improve visibility of opportunities, pre-engagement, sector awareness within commissioning • Support programmes to provide VCSE perspective and maximise efficiency

6. Current state of VCSE in public services market • “We will support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the running of public services.” Coalition Agreement

7. Current state of VCSE in public services market • “Government is determined to improve the quality of public services, while continuing to reduce the deficit in public finances. To meet this challenge, we are opening up public services....we want those buying services on our behalf to have more space for innovation and more choice – because we believe in the power of competition to increase standards and deliver better value. This commitment is rooted in a recognition that charities and social enterprises have an enormous amount of value to add in helping us shape and deliver better services.”Making it easier for civil society to work with the state. Nick Hurd, Minister for Civil Society

8. Current state of VCSE in public services market The public sector income mix for the charity sector is changing; statutory income from contracts has increased by £6.6bn, whereas grant income has decreased by £1.4bn since 2000/01. • Charities received £13.9bn from government in 2009/10, 38% of total income to the sector... • 51% (£7bn) comes from Local Authorities; • 44% (£6.1bn) comes from Central Government and NHS; and • 6% (£0.8bn) comes from European and International sources. • £10.9bn is contract income (78%), whilst £3.0bn is grant income (22%). Grant Income Contract Income • 75% of general charities do not receive any income from the state. • Approximately half of public sector spend goes to ~350 of the largest charities • 97% goes to charities with income over £100k. Over half of social enterprises derive all of their income from trading; public grants form the most common source of non trading income. UNCLASSIFIED

9. VCSE advantages for public sector buyers • Core focus on meeting beneficiary needs – perfect fit for outcome-focused service commissioning and ‘black box’ commissioning • Not-for-profit or not primarily driven by profit – reduces cost, supports cultural fit with public sector & helps focus on meeting customer needs (not shareholders’) • Social purpose enables genuine open, partnership approach – enables flexibility to work in different models (supply chains, collaboratives, mutuals, etc) and creates options for co-design • VCSEs should inherently deliver positive social value – meet commissioners’ needs re Social Value Act & Best Value Guidance .

10. Key issues for VCSEs • Commissioning environment has changed rapidly – new financial risk and shift from grants to contracts • Commissioning for products and services is often large scale and complex – expertise, financial scale and resources are required • Commissioners may not recognise the strengths of the VCSE offer or understand the nature of these suppliers sufficiently well • VCSEs may not have skills, governance, culture, access to finance to succeed in this environment .

11. Overcoming obstacles to VCSEs • Commissioning environment has changed rapidly – awareness & pre-market engagement, commissioning intentions / pipeline, capacity building (ICRF, Masterclasses) • Commissioning for products and services is large scale – lotting strategy, models of delivery (collaboration), supply chain strategy, social financial role • Commissioning for products and services is complex – simplification of procurement process, LEAN procurement, buying portals • Commissioning Academy .

12. Pre-market engagement • Be part of the conversation – understand policy and commissioning intentions in your sector • Try to meet commissioners and ‘get on the radar’ • Read and respond to policy consultations • Review procurement pipelines • Use Contracts Finder & Funding Central • Monitor PINs, register interest in future procurements and attend information days • Help buyers shape their procurement specification during informal pre-market engagement

13. Opening up business to VCSEs • Providing information on useful developments and opportunities via Twitter and providing updates to the VCSE sector through my website • Product Surgeries • VCSEs present their services directly to Government buyers • Improve Government buyers' awareness of VCSEs • Support new procurements to ensure excellent VCSEs can effectively offer their services

14. Progress – improving market access, transparency and VCSE capacity • Support commissioning and contracting design • Awareness of greater access & opportunity: • All contracts now published including under the £100K threshold • PQQs gone for <£100K contracts (simplified for above) • Public Services (Social Value) Act • Investment & Contract Readiness Fund • VCSE Commercial Masterclasses .

15. Tendering - Masterclasses • Build VCSEs’ commercial skills for public service delivery • What the Masterclasses cover: • Context: the changing market and your place in it • Building effective relationships: raising your profile, positioning and building relationships with partners and commissioners; the private sector as a partner • Assessing subcontracting opportunities: risk and financial assessment • Bidding and governance: skills for effective bid management, governance and setting contract terms • Negotiation: the importance of doing it, and how to do it well • Implementation and contract delivery: tools, processes and challenges when preparing for and delivering a contract. • Learning and adapting: how to respond to changing circumstances during the contract.

16. Thank-you for listening • Michael O’Toole • Please follow me on Twitter: https://twitter.com/otoole_michael UNCLASSIFIED