Commercial Acumen – the Key for the Third Sector in Health and Social Care

In recent years, the private sector has dominated health and social care contracts – winning almost 70% of tendered contracts. While legislation in 2013 was intended to usher in an era of greater competition, it is an opportunity which charities, social enterprises and community groups have at times struggled to take. Without the commercial expertise to navigate the procurement process, many third sector organisations are falling short and failing to fulfil their purpose.

A private business in this situation would face questions from investors or shareholders: why is the business ill equipped for a fundamental part of its role? Of course, the third sector faces different challenges. Donors expect their money to go into core activities. In health and social care, this means beds and nurses, not business directors or commercial support. And, with a tendering process that can take months or even years between initial notice and final award, it can appear that the time and resource could be better spent. Yet the fact is that winning the contract is part of those core activities; it’s well worth investing in the tendering process. Each contract brings stability, growth and a greater chance of winning the next – giving each donation greater impact in the long term.

For some organisations in the third sector, that means building capability. For others, it could mean building partnerships. Private businesses dominate the sector, but the largest individual contracts often go to coalitions of private suppliers and charities or trusts. Where some voluntary organisations might lack the resources or infrastructure to manage large-scale, long-term services, a well-founded strategic partnership bridging the third and private sectors could be trusted to deliver. Some CEOs will worry about how their donors or stakeholders feel about such an arrangement. But, again, finding a business that shares similar values may be more than justifiable – it could be crucial.