The UK’s public sector is grappling with an unprecedented crisis: rising demand, dwindling budgets, and an over-reliance on costly private sector solutions. Nowhere is this more evident than in the care system, where Local Authorities are haemorrhaging funds to private equity-led providers while struggling to meet the needs of vulnerable children. But there is a better way. Charities like AWL, firmly rooted in their local communities, represent a powerful, cost-effective, and ethical alternative.
This article explores why public policy must prioritise the third sector and small-to-medium enterprises (SMEs) to ensure that every pound of public money strengthens local ecosystems and benefits the community.
The Problem: A Care System Hijacked by Private Equity
Children in care are now costing Local Authorities eye-watering amounts of money. Private equity firms have swooped into the sector, recognizing its lucrativeness. Placements that once cost councils modest amounts now carry inflated price tags, with profits siphoned off to shareholders—many of whom have no connection to the communities footing the bill.
This trend is unsustainable. The focus on profit rather than care quality creates a system where vulnerable children become commodities, and Local Authorities are left with little choice but to overspend. Meanwhile, the local economy suffers, as profits are extracted rather than reinvested.
The Third Sector: A Better, Local Solution
Charities like AWL offer an ethical and financially sustainable alternative to this broken model. Third sector organizations often deliver better outcomes for less money, thanks to their mission-driven ethos and local focus. However, to truly unlock the potential of these organizations, public bodies must move beyond mere rhetoric and implement bold procurement policies that support the third sector and SMEs.
Local Charities: Reinventing “Profit” as Local Surplus
It’s time to acknowledge that charities, too, must generate surplus—profit by another name. But unlike private equity firms, local charities reinvest their surplus directly into their communities. AWL, for instance, would reinvest in creating local jobs, developing community resources, and expanding its services. This creates a virtuous cycle where public money stays within the region, multiplying its impact.
Contrast this with larger charities or external private providers: unless they are headquartered in West London or have strong regional ties, their surplus leaves the area. Public procurement policies must recognize this reality. Every pound spent on local charities and businesses is a pound that directly benefits the local community. Why should West London’s taxpayers subsidize profits that ultimately disappear into the coffers of national or global organizations?
Public Policy: Think Global, Procure Local
The public has been encouraged for years to “Think Global, Shop Local.” It’s time for public procurement policies to follow suit. Every decision on where public money is spent should consider the economic ripple effects. Investing in local third sector organizations and SMEs not only delivers better value for money but also strengthens the local economy.
A Call for Fundamental Procurement Reform
Current procurement practices often favor large organizations with the scale to compete in complex bidding processes. This inadvertently sidelines smaller, equity-led businesses and charities that are deeply embedded in their communities. If it’s public policy to support equity-led businesses, governments must overhaul procurement systems to level the playing field.
Here’s how:
Streamline Procurement for SMEs and Charities: Simplify bidding processes so smaller organizations can compete. Red tape and complexity currently exclude many capable local providers.
Prioritise Local Impact: Mandate that public contracts prioritize bidders who demonstrate local reinvestment and community impact.
Invest in Local Capacity Building: Provide grants or seed funding to help local charities and SMEs scale their operations to meet public sector demand.
Monitor Regional Benefits: Track how much surplus or profit remains in the region versus what leaves. This data can guide better procurement decisions.
Why It Matters: Investing in Local Ecosystems
Local charities and SMEs are the lifeblood of communities. They understand the unique challenges and strengths of their regions, and they operate with a vested interest in local success. Supporting them is not just a moral imperative—it’s an economic strategy.
Children in Care: A Case in Point
Imagine if Local Authorities invested in charities like AWL to provide care for vulnerable children. Instead of lining the pockets of private equity, funds would support:
Community-based foster programs.
Local therapeutic services tailored to children’s needs.
Training and employment for local residents in care-related professions.
These solutions not only save money but also strengthen the social fabric, creating a safety net that is resilient and self-sustaining.
A Vision for the Future
Public procurement is not just a financial exercise; it’s a statement of values. When governments choose to spend public money, they must ask: Does this investment benefit the community as a whole? Or does it merely funnel money away from the region into private hands?
Charities like AWL stand ready to partner with Local Authorities, offering solutions that are ethical, effective, and economically sound. But to fully leverage the potential of the third sector, public policy must change. By prioritising local organisations and SMEs, governments can deliver better services, build stronger communities, and ensure that every pound of public money works as hard as possible for the people it’s meant to serve.
Now is the time for bold action. Let’s move beyond words and create procurement policies that put communities first—because West London, and every other region, deserves nothing less.
Gary Buckley
Chief Executive
Action West London