EU rules thwarting charities from bidding to run council services

Another day. Another reason to leave the EU. The Public Administration Select Committee report on the Big Society. By applying the EU Public Contracts Regulations (2006) councils cause small local charities to give up in despair at putting in a tender to run services. The cost of bidding is prohibitive.

The report says:

We welcome the Minister for the Cabinet Office’s recent announcement on the Government’s intention to re-negotiate EU procurement regulations. We look forward to the Government setting out what changes they are seeking, why they are sought and the timescale for implementation of the changes. We also recommend that the Government set out detailed plans to revise procurement guidance under the existing regulations.

The National Association for Voluntary and Community Action claim that the EU rules are being gold plated by councils. They say there is an exemption for ‘Part B services’ such as “social services of general interest” which covers some of the public services carried out by voluntary groups. Yet the Office of Government Commerce’s EU Procurement Guidance—Introduction to the EU procurement rules "neither set out clearly the exemptions nor explains in practical terms what this means for local authorities."

Maybe council lawyers are being risk averse, maybe it will be possible to negotiate some concessions or exemptions or guidance to make the rules less onerous. But then you read on in the report and see the EU is causing more problems.

The report also said:

Another alleged bureaucratic barrier identified by the charity Community Links was the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), which protects employees' terms and conditions of employment when a business is transferred from one owner to another. These arise from the European Acquired Rights Directive.

They require that a charity or voluntary group wishing to deliver a public service has to take on the cost of personnel currently employed in providing the service, along with their existing pensions entitlement, annual leave, and other employment benefits. Charities delivering these promises will face potentially different sets of terms and conditions and employment benefits among their workforce. Community Links argued that the TUPE regulations restricted the ability of charities and social enterprises to “innovate or redesign services to better meet need.”

We recommend that the Cabinet Office consult the voluntary sector on the legislative and bureaucratic barriers which inhibit voluntary groups from delivering public services. We note the commitment of the Chancellor of the Exchequer, in his 2011 Autumn Statement, to a review of TUPE regulations, and we urge the Government to give special consideration to smaller charities in this review.

Our EU membership is and will remain a barrier to an enhanced role for small charities in delivering services which is at the heart of  the Big Society.