The chief executive of collapsed contracting charity Lifeline Project warned last year that charities like his were being "squeezed" out of existence by the contracting process.
Lifleline Project, a £60m drug and alcohol charity, collapsed last week, although a “significant” number of its services are expected to be transferred to a larger charity, Change Grow Live.
In an article posted on the charity’s website in November 2016 Ian Wardle, who had been chief executive of the charity for nearly 25 years, outlined what he described as “disinvestment” in the provision of drug treatment services.
“For the past five years we have seen a gradually accelerating wave of disinvestment in our sector,” he said. “We are being squeezed between the state and the private sector.”
He said the government’s Transforming Rehabilitation programme was an example of the system favouring larger providers.
“Our business models are now subject to the kind of stresses that lead to structural failure,” he said. “There is an immediate need for more open commissioning practice.”
He said providers were “tempted to sign up to pricing decisions that mean delivering at a loss”.
He said the sector “has yet to find a way to make prevention pay” and that this was a major issue in an environment more dominated by payment-by-results contracts.
‘Employees frustrated by governance’
Wardle also warned that outdated governance structures in the charity sector were adding to the problem.
“Many third sector employees are frustrated about the forms of management and governance to which they are subject,” he said. “It may be that the somewhat stifling environment of charitable governance is inhibiting organisations that are looking for new ways of generating income.”
He called for “greater flexibility” to enable to charities to experiment more.
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