Large organisations to sub-contract supported housing work under Downing Street proposals
Number 10 steps in to save small providers
Large providers could be forced to sub-contract supported housing contracts to smaller organisations, under crisis growth plans drawn up by the government.
Officials from 10 Downing Street held a hastily assembled meeting with providers on 10 February to address government fears that smaller organisations - seen as vital to employment and economic growth - are being squeezed out of local authority supported housing contracts.
The intervention was a response to ministers’ concerns that the average 4.4 per cent cut to council budgets and the 11.5 per cent cut over four years to Supporting People funding are forcing town halls to increase the size of contracts to generate economies of scale, making it difficult for smaller providers to compete.
Suggestions include helping small providers to form consortia to improve their bidding chances, and asking larger providers to sub-contract to smaller businesses to help them gain work.
It is understood the sub-contracting model could be similar to that of Serco, which manages transport, education and waste services for local authorities by employing companies to deliver these services.
Paul Kirby, head of policy at the prime minister’s strategy unit, called the summit as part of a government review of the biggest public procurement budgets, including councils’ £1.5 billion a year SP budget.
Attendees included the Chartered Institute of Housing, the National Housing Federation, Manchester Council, Bristol Council and several large social landlords, which were informed of the meeting with just over a week’s notice.
Nick Hooper, service director for strategic housing at Bristol Council, which has an annual SP budget of £26 million, said he was keen to look at alternative procurement models: ‘We have around 140 different contracts at the moment, but over time, [contracts] are likely to get larger and there will be fewer of them as we try to drive efficiency internally.’
Dominic Wood, chief executive of charity Independent People, which each year provides housing and support for around 800 people aged 16 to 25 in Bristol, said: ‘I think we’ll be OK because we’re very specialist, but there are a lot of providers that aren’t able to compete in the market.’ Small providers should work together to promote themselves to councils, he added.
Domini Gunn, director of public health and vulnerable communities at the CIH, said: ‘The market has been so destabilised in England by cuts to Supporting People funding that, while anything we can do to improve the way procurement takes place is important, it’s actually a very difficult environment to do that in.’