The Commissioning Joint Committee Guide to Buying from the Third Sector

There is now intense pressure on local authorities to make much greater use of the third sector, both by giving financial support to third sector bodies to carry out work which authorities would otherwise have to do themselves, and by buying services from them. Greater use of the third sector, by every available means, figured strongly in the Labour Party election manifesto, and is clearly one of this government’s ambitions.

The CJC has therefore completed a hard-hitting Guide to buying from the third sector. The Guide does not specifically address supporting, but it does explore the legal and practical differences between them.

There is already a vast amount of literature about the strengths of the third sector (which the CJC entirely accepts) and also about how contracts may be made more attractive to third sector bodies. Most of the literature does not however consider the possible costs of doing so, in terms of higher procurement costs, loss of economies of scale, and the diminished attractiveness of contracts to most private contractors if they are made more attractive to the third sector.

The CJC agrees that these costs are often well worth incurring, but believes that authorities and their budget holders need to look at the costs realistically. The Guide analyses what may be done to help the third sector, the likely gains from doing so, and the possible costs.

Like all CJC publications it addresses the wicked issues, such as the restrictions on policies of local purchasing, the impact of TUPE on third sector bodies, the prohibition on state aid for third sector tenderers, the practical effects of the incoming EU Consolidating Directive, and the points at which offers of financial support become contracts, and at which such contracts become subject to procurement law.

It also quotes extensively from other publications which have been particularly forthright in pressing for greater use of the third sector, and from the CJC’s own Standing Guide to the Commissioning of Local Authority Work and Services.

The Guide was drafted by the CJC’s Third Sector Steering Group, which includes members from all three sectors.