April 2010 - all change for the NfP sector?

The Legal Services Commission has published proposals for bids for civil contracts from April 2010. These are set out in the consultation paper Civil Bid Rounds For 2010 Contracts: A Consultation.
 
The LSC intends to seek bid for 2010 contracts in July 2009. The bid round will be open, so all existing providers will have to bid to have their contract renewed.
 
As far as social welfare law services are concerned, the LSC’s main objectives are to develop what it calls integrated services that:

• cover multiple categories of law - the LSC has stated that it intends to move towards purchasing all five social welfare law services together
• deliver the full range of work from Legal Help to Licensed Work, i.e. litigation services provided by solicitors.

 
The LSC is therefore proposing that organisations wishing to bid for social welfare law services must bid for one or more of the following combinations of categories:

• housing, debt and welfare benefits
• housing and family
• employment
• community care.

 
The LSC will no longer award sole contracts in housing, debt or welfare benefits. Nor will it award contracts in any combination of two of these categories.
 
This will have a major impact on the NfP sector. According to our analysis of data provided by the LSC, in April 2008 there were about 400 NfP contracts in either housing, debt or welfare benefits. Only 17% of those covered all three categories (37% covered one category only and 46% covered two categories only). This means that over 80% of NfP organisations will need either to expand their services or enter consortium arrangements if they wish to continue doing legal aid work.
 
For the time being, the LSC will continue to award sole contracts in employment and community care. But note that under the bid criteria, in a competitive situation the LSC will give preference to organisations bidding to provide the greatest number of social welfare law categories.
 
Mergers and Consortia
 
Organisations will be able to bid together on the basis that they will merge, forming a single legal entity if the contract is awarded.
 
In relation to social welfare law services only, organisations will be allowed to deliver services through consortia, under which each organisation will maintain their separate identity. This could include consortia of NfP organisations and private practice firms.
 
The LSC will not allow sub-contracting.
 
There are a number of other significant changes proposed in the consultation relating to quality requirements, and bidding and selection criteria. We urge organisations to read the paper in full.