NCVO and Serco develop code of practice for prime and subcontractors

A leading organisation representing the voluntary sector has teamed up with Serco to draw up a code of practice intended to improve relationships between prime and subcontractors in public services.

The code developed by NCVO and the outsourcing giant covers issues such as:

• Setting reasonable expectations;
• Having strong mechanisms for open dialogue between contractors; and
• Developing financially sustainable models.

It also warns prime contractors against paying lip service to VCS (voluntary community sector) organisations in order to boost their chances of winning public sector contracts.

The code calls for regular discussions to take place between prime and subcontractors in cases where, for example, referral numbers are lower than expected.

It also suggests that delivery models should recognise and mitigate the risk of prime contractors 'cherry picking' clients, and that prime contractors should ensure subcontractors are not exposed to disproportionate financial risk.

Serco said it would follow the guidance when it subcontracted within its public service contracts, and would also encourage other outsourcing companies to sign up to the document.

Sir Stuart Etherington, chief executive of NCVO, said: “There has been a major growth in subcontracting, but NCVO's members have had very mixed experiences of it. This joint guidance is part of our attempts to raise standards in subcontracting.

“We are certainly not saying subcontracting is always the right way to deliver public services. But where services are delivered in this way, we want to make sure that they are delivered well and that subcontractors are treated fairly. We have deliberately made the principles in this guidance applicable to prime-sub relationships within any sector.”

Jeremy Stafford, chief executive of Serco UK & Europe, said: “This code sets the bar high for how companies such as Serco should work alongside their partners in the voluntary sector – and rightly so.”

The code of practice will be made available here.