9 January 2013
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.
A CAF report - Funding good outcomes - Using
social investment to support payment by results -
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.”
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