Spotlight The press is ablaze with talk of increasing possibilities for charities and social enterprises to start delivering public services. The Public Services (Social Values) Act, coming into force on 31st January 2013, is adding further excitement. For the first time, public bodies in England and Wales are required to consider how services which they commission might improve the economic, social and environmental well-being of their relevant area. Procurement law already enables public bodies to take factors other than cost into account, but many believe this legislation will make it easier for voluntary sector organisations to compete with the commercial sector when tendering to take on functions from the public sector. Whether your organisation is sharpening your pencil to start writing bids or taking an interest from afar, there are important issues to consider when tendering and contracting for such services. Key considerations are as follows:- ◆ ◆ Can you do it? Ensure that any activities are within your objects – this is particularly important for charities, but may be relevant to others. For instance, if you are established to benefit “children”, you might not be able to take on services for 19 – 25 year olds. ◆ ◆ Plan ahead – ensure that you understand the arrangements. If something is not clear, the contracting body may not have thought about it. Producing a comprehensive business plan will help minimise problems. Be particularly aware of overheads, transitional costs and tax (including VAT). ◆ ◆ Structure – if this is a significant contract, consider your organisation’s structure, perhaps with your accountant. For example, do you require a trading subsidiary? If you are not a charity, would charitable status lead to significant savings? Also be aware of maintaining your independence in light of controls that the public body may require. ◆ ◆ What is the public body doing? You may think that what the public body does is not your concern, but it may affect you. For instance, is a local authority allowed to transfer particular services and, if so, is it complying with procurement requirements? State aid may also be an issue. ◆ ◆ Income streams – will you be paid only by the public body or are you reliant on third party income streams? If the latter, how can you minimise possible risks (e.g. competition, popularity). Will the public body pay you in any event or are you required to meet targets? Payment by results grabbed headlines last year – Jumping on the Public Services Bandwagon Working with the Not-for-Profit Sector Winter 2012/13 CONTENTS 1–2 Jumping on the Public Services Bandwagon 2–3 Charities in Court: An update on recent caselaw 3 Client Focus – DEBRA 4–5 Energy Update 5 CIO Update 5 Meet the Team: Julia Davenport-Cooper s
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Transcript
Spotlight
The press is ablaze with talk of increasing possibilities for
charities and social enterprises to start delivering public services.
The Public Services (Social Values) Act, coming into force on 31st
January 2013, is adding further excitement. For the first time,
public bodies in England and Wales are required to consider how
services which they commission might improve the economic,
social and environmental well-being of their relevant area.
Procurement law already enables public bodies to take factors
other than cost into account, but many believe this legislation
will make it easier for voluntary sector organisations to compete
with the commercial sector when tendering to take on functions
from the public sector.
Whether your organisation is sharpening your pencil to start
writing bids or taking an interest from afar, there are important
issues to consider when tendering and contracting for such
services. Key considerations are as follows:-
◆◆ Can you do it? Ensure that any activities are within your
objects – this is particularly important for charities, but may
be relevant to others. For instance, if you are established to
benefit “children”, you might not be able to take on services
for 19 – 25 year olds.
◆◆ Plan ahead – ensure that you understand the arrangements.
If something is not clear, the contracting body may not have
thought about it. Producing a comprehensive business plan will
help minimise problems. Be particularly aware of overheads,
transitional costs and tax (including VAT).
◆◆ Structure – if this is a significant contract, consider your
organisation’s structure, perhaps with your accountant. For
example, do you require a trading subsidiary? If you are not a
charity, would charitable status lead to significant savings? Also
be aware of maintaining your independence in light of controls
that the public body may require.
◆◆ What is the public body doing? You may think that what
the public body does is not your concern, but it may affect
you. For instance, is a local authority allowed to transfer
particular services and, if so, is it complying with procurement
requirements? State aid may also be an issue.
◆◆ Income streams – will you be paid only by the public body or
are you reliant on third party income streams? If the latter, how
can you minimise possible risks (e.g. competition, popularity).
Will the public body pay you in any event or are you required to
meet targets? Payment by results grabbed headlines last year –
Jumping on the Public Services Bandwagon
Working with the Not-for-Profit Sector Winter 2012/13
CONTENTS
1–2 Jumping on the Public Services Bandwagon
2–3 Charities in Court: An update on recent caselaw
3 Client Focus – DEBRA
4–5 Energy Update 5 CIO Update 5 Meet the Team:
Julia Davenport-Cooper
s
broadly, these can be divided into output and outcome-based.
If your payment is based on outcomes, there may be a time-lag
before money starts flowing.
◆◆ Staff – if staff will transfer to your organisation, carry out
appropriate consultation and checks and ensure that you have
protections in case problems arise. Ensure that you can provide
access to an appropriate pension scheme as required.
◆◆ Premises – if premises are part of the arrangements, will
there be a lease or licence? If premises are shared with other
organisations, understand how the arrangements will work
– you may need separate joint use arrangements. Ensure you
have the access that you require.
◆◆ Assets and liabilities – in short, consider which assets and
contracts your organisation will require and ensure that you
are receiving them, preferably without any historic liabilities.
We would recommend that you seek legal advice if you are
unsure about any of these issues and, unless you are very
experienced with contracting, definitely before entering into a
significant supply contract. For more information, please contact
The Spotlight deals with some current legal topics. It should not be used as an alternative to specific legal advice on the individual circumstances of a particular problem. Stone King LLP - registered limited liability partnership no OC315280, registered office 13 Queen Square, Bath BA1 2HJ
Charity & Social Enterprise:Michael King Partner Jonathan Burchfield Partner Robert Meakin Partner Ann Phillips Partner Alexandra Whittaker Associate Hannah Kubie AssociateTom Murdoch AssociateVicki Bowles Barrister Sarah Clune Solicitor Darren Hooker Solicitor Reema Mathur Solicitor
Charity Legacy Team: Jonathan Burchfield Partner Robert Meakin Partner Paul Sutton Partner
Child Protection: Steven Greenwood Partner
Commercial Property: Hugh Pearce Partner Stephanie Howarth Partner Hugo Greer-Walker Partner Catherine Sanderson Senior AssociateAndrew Small Senior Associate Julia Davenport-Cooper Senior Associate Joanne Burton Associate Sally McFadden Associate Tamsin Simmonds AssociateDaisy Barnett Solicitor Chris Sharpe Solicitor Kathryn Williams Solicitor
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Dispute Resolution: Paul Sutton Partner Antony Pidgeon Associate
Health & Safety: Andrew Banks Partner David Milton Associate Solicitor
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