Payment by results reforms must not deter charities
Howard Lake | 9 January 2013 | News
The Government must ensure its attempts to introduce payment by results for rehabilitation services do not squeeze out charities and community groups, the Charities Aid Foundation said today.
Ministers plan to let security firms and voluntary groups take on probation services on a payment by results basis.
But the Charities Aid Foundation (CAF), which promotes charitable giving and provides financial services and social finance to not-for-profit organisations, warned that current payment by results contracts run the risk of excluding charity and social enterprise expertise.
Advertisement
A CAF report published earlier this year says that charities often face difficulties bidding for Government payment by results contracts because of the risks inherent in the payment by results model, they have too little time to assess contracts, and lack up-front funding to pay for their work.
John Low, Chief Executive of the Charities Aid Foundation, said: “Charities and other not-for-profit organisations work closely with beneficiaries and have a huge amount of expertise in tackling sometimes intractable social problems. Payment by results contracts can represent real opportunities to tap into the depth of charities' experience and make a real difference.
“But most charities simply cannot afford to take on contracts to tackle social problems without up-front funding because they are not allowed to carry large financial reserves and have limited access to capital compared to for-profit businesses.
“We need to ensure the payment by results revolution does not exclude charities so that voluntary sector organisations can play their full part in the heavy lifting needed to transform our public services.”
ENDS
Read CAF's report on payment by results contracts and the voluntary sector here: https://www.cafonline.org/pdf/Funding%20Good%20Outcomes.pdf
Contact: Charities Aid Foundation Press Office: 03000 123 286/03000 123214/03000 123275/03000 123212
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.